Chapter 1 Money and Money Market 货币与货币市场

Learning Objectives:

1. To learn the origin and definition of money.

2. To understand how the existence of money facilitates the development of an economy.

3. To understand the functions of money.

4. To grasp the evolution of the payment system.

5. To learn about monetary system, including present China’s monetary system. 

1.1 Origin and Definition of Money  货币的起源和定义

教学视频：

课堂练习：

问题讨论：

1. Market Economy and Exchange Activities    市场经济与交换

The emergence of money is closely linked to the development of exchange system, and market economy is in fact an economy of exchange.  So the study of money should be based on the analysis of market economy.

Historically, the division of labor is prerequisite for the emergence of the market economy. People found in the longtime production that they could become most satisfied and the social  efficiency could be the largest if peoplewith their own specialty engaged in what fitted them most and exchanged with others the products and services they produced

So specialization of labor first emerged, the foundation of social exchange was laid and the exchange system occurred.

2. The Origin of Money 货币的起源

Money appeared after the exchange system.

There are two types of exchange in thehistory: one is barter,in which goods or services are exchanged for other goods or services. It’s a kind of exchange without money and may be also called direct exchange. Barterdepends on a double coincidence of wants, which occurred only when a trader who had goods or services wanted to find someone else who had goods or services hewanted and who also wanted goods or services he had to offer.

The other is indirect exchange,that is exchange of goods and services with money. As one commodity became generally acceptable in return for all other goods, that commodity began tofunction as money. So money appeared.

3. The Definition of Money 货币的定义

Marx defines money as a special commodity that permanently serves as general equivalent.

马克思将货币定义为一种永久地作为一般等价物的特殊商品。

Western economists define money (or, equivalently, the money supply) as anything that is generally accepted in payment for goods or services or in the repayment of debts.

西方经济学家将货币(或等值的货币供应)定义为任何被普遍接受的用于支付商品或服务或偿还债务的东西。

Checkpoint:

Do we still need money if there is no exchange activity in the economy?

Why or why not?