Properties and Functions of Money

Properties and Functions of Money Money is an important feature of virtually every economy. Without money, members of a society must rely on the barter system, or some other exchange program, in order to trade goods and services. Unfortunately, the barter system has an important downside in that it requires a double coincidence of wants. In other words, the two parties engaged in a trade must both want what the other is offering. This feature makes the barter system highly inefficient. For example, a plumber looking to feed his family would have to search out a farmer who needs plumbing work done on his house or farm. If such a farmer were not available, the plumber would have to figure out how to trade his services for something that the farmer wanted so that the farmer would be willing to sell food to the plumber. Luckily, money largely solves this problem. What Is Money? In order to understand much of macroeconomics, its crucial to have a clear definition of what money is. In general, people tend to use the term money as a synonym for wealth (e.g. Warren Buffett has a lot of money), but economists are quick to clarify that the two terms are not, in fact, synonymous. In economics, the term money is used specifically to refer to currency, which is, in most cases, not an individuals only source of wealth or assets. In most economies, this currency is in the form of paper bills and metal coins that the government has created, but technically anything can serve as money as long as it possesses three important properties. The Properties and Functions of Money The item serves as a medium of exchange. In order for an item to be considered money, it must be widely accepted as payment for goods and services. In this way, money creates efficiency because it eliminates uncertainty regarding what is going to be accepted as payment by various businesses.The item serves as a unit of account. In order for an item to be considered money, it must be the unit that prices, bank balances, etc. are reported in. Having a consistent unit of account creates efficiency since it would be pretty confusing to have the price of bread quoted as a number of fish, the price of fish quoted in terms of t-shirts, and so on.The item serves as a store of value. In order for an item to be considered money, it has to (to a reasonable degree) hold its purchasing power over time. This feature of money adds to efficiency because it gives producers and consumers flexibility in the timing of purchases and sales, eliminating the need to immediately trade ones income for goods a nd services. As these properties suggest, money was introduced to societies as a means of making economic transactions simpler and more efficient, and it mostly succeeds in that regard. In some situations, items other than officially designated currency have been used as money in various economies. For example, it used to be somewhat common in countries with unstable governments (and also in prisons) to use cigarettes as money, even though there was no official decree that cigarettes served that function. Instead, they became widely accepted as payment for goods and services and prices began to be quoted in the number of cigarettes rather than in official currency. Because cigarettes have a reasonably long shelf life, they do in fact serve the three functions of money. One important distinction between items that are officially designated as money by a government and items that become money by convention or popular decree is that governments will often pass laws stating what citizens can and cannot do with money. For example, it is illegal in the United States to do anything to money that makes the money unable to be further used as money. In contrast, there are no laws against burning cigarettes, aside from those banning smoking in public places of course.

14 College Graduation Gifts to Give Yourself

14 College Graduation Gifts to Give Yourself Graduating from college is no easy feat- and no one knows the effort you put in and the obstacles you overcame better than you do. Since your college graduation will likely be one of the biggest milestones of your life, its worth it to reward yourself for all youve accomplished. But just what kinds of things work well as a college graduation gift to yourself?  Here are the best graduation gifts to give yourself. 1. A Nice Diploma Frame Youve probably seen these in your campus bookstore or a local shop in town. In essence, diploma frames are a nice frame in which you can hang (and preserve) your actual diploma. Some have a small logo from your college; others have a large picture of campus as well. Regardless, a nice diploma frame can be a great way to formally acknowledge your graduation. Additionally, it can serve as appropriate and professional wall decor for your first office. 2. An Elegant Business Card Holder Sure, exchanging contact information happens electronically most of the time. And yet there can still be situations- like cocktail parties, airline flights, or other unexpected situations- when a simple conversation turns into a networking opportunity. Having your business cards available in a nice, classy case (in contrast, to, say, your old wallet) can be a smart way to present yourself. And it can be a nice gift to yourself that lasts for years to come. 3. Life For a Day Pictures You may be eager to leave your college life and your campus, but there are still things you will miss about your college years. Consider spending a day- or even just an hour or two during the day- taking pictures of the details of your life. What does your room look like? Your residence hall, apartment building, or house? What do you have hanging on the walls? What kinds of clothes are in your closet? What kinds of technology are you using? Where are the places you spent the most time- studying, hanging out, making memories- on campus? Off campus? In essence, create a photo journal of what your college life looks like. You never know how much you might treasure those simple snaps 10, 20, or even 50 years from now. 4. Write a Letter to Yourself Similar to an autobiographical photojournalism project, writing a letter to yourself can be an amazing gift for Future You. What are your dreams? What kind of life do you picture for yourself? What have you loved most about your time in college? What do you regret? What do you wish you had done differently? Theres no right answer or a specific thing you should write about. Just listen to your heart and say something that you want your future self to hear. 5. College Clothing It sounds so simple- after all, how many free t-shirts did you accumulate during your time in school?!- but getting yourself some new clothes with your colleges name on it can be a great gift. Even if its just a simple t-shirt and running shorts, youll reconnect with this time in your life when youre out for a run or hitting the gym 1, 2, or even 5 years from now. Additionally, something comforting, like a zip-up hoodie, can be your go-to item when youre doing something you love, like spending a quiet night in after a busy week at work. A little gift now can be a great way to remind and reward yourself about all you accomplished during your college years. 6. Travel Gear Have the travel bug? Want a job that requires a lot of travel? Consider giving yourself something that can be part of your post-college-life journeys. A nice suitcase, a great handbag, or even a duffel bag with your college logo or name on it can fit the bill. Additionally, advertising your alma mater during your travels can be a surprising way to start a conversation with others who have a connection to your institution, too. 7. A Connection With Your Favorite Professor No matter your major, you likely had one professor with whom you really connected or who made a difference in your life- even if you never told them so. Before you leave campus, connect with him or her in some way. Buy one of their books youve never read and have them sign it for you. Ask them to meet for coffee or even during office hours so you can ask their advice and let them know how much you appreciated their presence during your time in school. Your connection doesnt have to be fancy to be meaningful; it just has to be genuine. 8. A Trip Somewhere Special Do you need some time to process the big changes in your life? Have you always wanted to, for example, take  a college road trip? Do you want to have one last adventure with your college friends before you graduate? Consider giving yourself a trip as a graduation present. Even though its not a tangible item you can put in a gift box, a trip can provide you with a lifetime of memories- and some much-needed rest and relaxation. 9. Something for Your Post-College Professional Life Do you need a great briefcase? A messenger bag? A new laptop for graduate school? A stethoscope? Scrubs? Consider giving yourself something important and meaningful that also connects to your professional goals. Even if you cant afford something that will last for decades, you can always use something for a season or two and then keep it as a memento. This was my very first professional [item name]! has a nice ring to it, even 20 years from now. 10. Something for Your Post-College Personal Life Do you want to acknowledge your graduation with something that symbolizes adulthood for you? Do you want a nice set of dishes, a great (double!) bed, or a killer business suit? Do you want new clothes from a nice shop or even some fancy cookware? Consider buying yourself something that feels adult and permanent. You can use it to remind yourself of your transition to adulthood and all the effort you made to set yourself up for success after college. 11. A Donation to an Organization That Helps Students Go to College No matter your situation, you didnt make it through college entirely on your own. Whether it was family, friends, administrators, professors, or community leaders, people undoubtedly helped you along the way. Consider giving back by making a donation to a community organization or your college (in the form of scholarship funds) so that others have support during their time in school, too. 12. Plant Something It doesnt have to be big and fancy to symbolize the start of a new chapter in your life. Whether its a small houseplant, a small herb garden, or even a hardy bush or tree in your parents backyard or a community garden, planting something that you can nurture and grow can be highly symbolic and rewarding. 13. Take Yourself Clothes Shopping Give yourself a cold, hard reality check by really looking at whats in your closet. You likely- and justifiably- have clothes appropriate for a college student. Which was fun until now...when you transition from being a student to being a graduate. Treat yourself to some clothing basics, both personally and professionally, so that you can enter this new phase of your life as prepared as possible. 14. A Spa Treatment Remember: spa treatments arent just for fancy folks (or even just girls!). Reward yourself to something as simple as a pedicure or as fancy as a full-day treatment. After all, you probably put your body through unbelievable amounts of stress and mistreatment during the past few years. Reward your physical and mental self with some relaxation and pampering. You might be surprised at how this simple luxury can rejuvenate your body, mind, and soul and prepare you to begin your post-college life refreshed and recharged.