1st-2nd Lessons_Functions of Money (1)

1. GLAD TO SEE YOU AGAIN, DEAR YEAR 12!

Hello everyone!
Welcome back to a brand-new school year – your
final and most important stage before graduation.
You are now the role models of our school, and
with that comes both responsibility and privilege.
So, let’s work together, stay curious, and aim high.

2. WHAT WILL WE EXPLORE THIS ACADEMIC YEAR?

Union Bank records
138% profit growth
The Trump administration has imposed 25 per cent
reciprocal tariffs on India

3. YES IT IS MACROECONOMICS

4. BRAINSTORM

• What is macroeconomics, and how is it different
from microeconomics?
• What are the main topics studied in
macroeconomics?
• Why should we care about macroeconomics? How
does it affect our daily lives?

5. DEFINITION

Macroeconomics is the study of the structure and
performance of national economies and of the policies that
governments use to try to affect economic performance.
Macroeconomics refers to the analysis of economy-wide
phenomena, including changes in business cycles,
unemployment, interest rates, government spending and
taxation, and exchange rate fluctuations, influenced by
global factors such as trade relationships and geopolitical
events.

6. LESSON THEME: MONEY

Teacher: Yerlan Iskanderov

7. LESSON OBJECITVES

⮚
Define money and explain why societies use it;
⮚
Identify and describe the key characteristics of
money;
⮚
Explain and evaluate the functions of money and
their role in a market economy.

8.

Let’s define a word “Money”
Money is any object that is generally
accepted as payment for goods and services
and repayment of debts in a given country or
socio-economic context.
Money is a medium of exchange for various
goods and services in an economy.

9. DISCUSSION QUESTIONS:

• What items have people used as money throughout
history, and what made these items suitable for use as
money?
• To what extent is money one of the most important
inventions in human history?
• Why do people trust banknotes and digital numbers as
money, even though they have little intrinsic value?
• How would people’s lives and economic activities
change if money did not exist?

10. Brief History of Money

Instructions.
• Read the article carefully;
• Prepare 1-2 questions based on the article:
At least one analytical question (Why? How?).
At least one evaluation question (Do you agree? What if…?)
• Class Sharing: Each pair will share their most interesting
question with the whole class.

11. Answer the following questions:

• Why did societies gradually move from
barter to different forms of money?
• What characteristics made cowrie shells
suitable for use as money?
• Which country introduced the world’s
first paper currency, and why was it an
important development in the history of
money?

12. CHARACTERISTICS OF MONEY

What are some characteristics of money?
Acceptability;
Durability;
Divisibility;
Easily recognizable;
Portability;
Homogeneity;
Relative scarcity;
Non-counterfeit ability
How do you explain these characteristics?

13. CHARACTERISTICS OF MONEY

Acceptability – People must be willing to accept it as payment.
Durability – It should last a long time without easily being damaged or destroyed.
Divisibility – It should be possible to divide it into smaller units for different-sized
transactions.
Recognizability – People should be able to easily identify it as genuine money.
Portability – It should be easy to carry and transfer from one person to another.
Homogeneity – Units of the same denomination should be identical in value and
quality.
Relative scarcity – It should be limited enough to retain value and not be freely
available to everyone.
Non-counterfeitability – It should be difficult to copy or produce illegally.

14. Functions of Money: Match the terms

Function
Explanation
Medium of exchange
Income can easily be distributed with the help of money. E.g., Distribution of total
money earned by a school in the form of salaries, wages, utility bills, etc.
A measure of value
The "store of value" function of the money helps in credit creation by the banks. E.g.,
Using the money of demand deposits as a tool for credit creation.
Standard of deferred
payments
It means that money is capable of being stored and transferring the purchasing power
from today to the future. E.g., Using the money in a savings account to buy new
furniture.
Store of value
Money is the most liquid asset of the economy. E.g., Credit cards, debit cards, cash.
Distribution of social
income
Money is considered the standard for future payments. E.g., The payment of the
electricity bill on the upcoming due date.
Basis of Credit creation
Money is the generally accepted medium of exchange that is used to make all the
transactions. E.g., payments of goods, payment of tax, etc.
Liquidity
Money expresses the value of every service as well as goods. Therefore, it is a
common denomination.

15. Functions of Money: Answer key

Function
Explanation
Medium of exchange
Money is the generally accepted medium of exchange that is used to make all the
transactions. E.g., payments of goods, payment of tax, etc.
A measure of value
Money expresses the value of every service as well as goods. Therefore, it is a common
denomination.
Standard of deferred
payments
Money is considered the standard for future payments. E.g., The payment of the electricity
bill on the upcoming due date.
Store of value
It means that money is capable of being stored and transferring the purchasing power from
today to the future. E.g., Using the money in a savings account to buy new furniture.
Distribution of social
income
Income can easily be distributed with the help of money. E.g., Distribution of total money
earned by a school in the form of salaries, wages, utility bills, etc.
Basis of Credit
creation
The “store of value” function of the money helps in credit creation by the banks. E.g., Using
the money of demand deposits as a tool for credit creation.
Liquidity
Money is the most liquid asset of the economy. E.g., Credit cards, debit cards, cash.

16. Activity 1

Matching (Functions with Examples)
Match each example with the correct function of money.
A. Medium of exchange
B. Unit of account
C. Store of value
D. Standard of deferred payment
You save 10,000 tenge to buy a bicycle next month. ( ___ )
A new smartphone costs 200,000 tenge, while a laptop costs 300,000 tenge. ( ___ )
You buy bread at the supermarket using cash. ( ___ )
You borrow money from a bank and agree to repay it in a year. ( ___ )

17. Activity 1: Answer key

Matching (Functions with Examples)
Match each example with the correct function of money.
A. Medium of exchange
B. Unit of account
C. Store of value
D. Standard of deferred payment
You save 10,000 tenge to buy a bicycle next month. ( C )
A new smartphone costs 200,000 tenge, while a laptop costs 300,000 tenge. ( B )
You buy bread at the supermarket using cash. ( A )
You borrow money from a bank and agree to repay it in a year. ( D )

18. TYPES OF MONEY

What are the types of money?
• Commodity Money;
• Fiat Money;
• Representative
Money;
• Fiduciary Money;
• Electronic/Digital
Money;
• Cryptocurrency;
• Liquid Money;
• Non-Liquid Money.
Can cryptocurrency eventually
traditional money? Why or why not?
replace

19. TYPES OF MONEY

Commodity Money – Money that has intrinsic value because the commodity
itself is valuable.
Examples: gold, silver, salt, cattle.
Fiat Money – Money that has value because it is declared legal tender by the
government and people trust and accept it.
Examples: tenge, US dollar, euro.
Representative Money – Money that represents a claim on a valuable
commodity, such as gold or silver.
Example: gold certificates.
Fiduciary Money – Money accepted because of trust in the issuer and
confidence that others will accept it.
Example: bank deposits.

20. TYPES OF MONEY

Electronic/Digital Money – Money that is stored and transferred
electronically rather than physically.
Examples: bank transfers, electronic payments.
Cryptocurrency – A digital form of money that uses cryptography and
typically operates on a decentralized block chain network.
Examples: Bitcoin, Ethereum.
Liquid Money – Money or assets that can be quickly and easily used to
make payments with little or no loss in value.
Examples: cash, money in a current account.
Non-Liquid Money – Assets that cannot be quickly used for payments
and
usually
need
to
be
converted
into
cash
first.
Examples: property, machinery, long-term investments.

21. Research the history of money in Kazakhstan

Instructions.
Work individually or in pairs.
Research the development of money in Kazakhstan, from ancient times to the modern
tenge.
Focus on the following key points:
What forms of money were used in ancient Kazakhstan (e.g., barter, coins, commodity
money)?
How did money change during the Silk Road period?
What types of money were used during the Soviet era?
When and why was the Kazakhstani tenge introduced?
How is money evolving today (e.g., use of digital money and electronic payments)?

22. History of money in Kazakhstan

ANTIENT YEARS
Bartering
(domestic
animals, fur etc.)
COINAGE PERIOD
8th century
Usage of gold and
silver coins in Turk
khaganate
Kazakh Khanate
15-18 century
Minted coins, but
bartering
remained
Russian Empire
19th century
Rubles as a main
currency,
emerging of bank
system
Soviet Union
20th century
USSR rubles,
centralized
monetary policy,
money to fulfill plans
Modern days
Since 1999 tenge
is convertible, the
currency rate is
defined by market
Independence
1991
Introduction of own
currency
15.11.1993
Introduction of
Tenge

23. REFLECTION

• Which type of money do you think is most reliable in
today’s world, and why?
• How has the role of money changed over time, from
commodity money to digital money?
• If our society had to go back to using commodity money,
what challenges would we face?
• How does money influence the way we make decisions in
our daily lives?