Money is what type of resource

Resources must be verified when questionable. See MS for verification procedures. Sources of verification are described in the Administrative Procedures Manual. The following describes the definition of resources for purposes of SNAP. Liquid Resources. Note: Money in a crowdfunding account is considered an accessible liquid resource if the account was set-up by the household. If the account was set-up by someone outside of the household, the money in the crowdfunding account is not considered an accessible liquid resource until the funds have been given to the household.

Note: The Eligibility Technician should count the actual value of funds accessible to the household at the time of interview. Non-liquid Resources. Determine the fair market value. The third factor of production is capital. Think of capital as the machinery, tools and buildings humans use to produce goods and services.

Some common examples of capital include hammers, forklifts, conveyer belts, computers, and delivery vans. Capital differs based on the worker and the type of work being done. For example, a doctor may use a stethoscope and an examination room to provide medical services. Your teacher may use textbooks, desks, and a whiteboard to produce education services.

The income earned by owners of capital resources is interest. The fourth factor of production is entrepreneurship. An entrepreneur is a person who combines the other factors of production - land, labor, and capital - to earn a profit. The most successful entrepreneurs are innovators who find new ways produce goods and services or who develop new goods and services to bring to market.

Without the entrepreneur combining land, labor, and capital in new ways, many of the innovations we see around us would not exist. Think of the entrepreneurship of Henry Ford or Bill Gates.

Entrepreneurs are a vital engine of economic growth helping to build some of the largest firms in the world as well as some of the small businesses in your neighborhood.

Entrepreneurs thrive in economies where they have the freedom to start businesses and buy resources freely. The payment to entrepreneurship is profit. You will notice that I did not include money as a factor of production. You might ask, isn't money a type of capital? Money is not capital as economists define capital because it is not a productive resource.

While money can be used to buy capital, it is the capital good things such as machinery and tools that is used to produce goods and services. Trying to use a non-portable good as money could produce transaction costs of either physically transporting large quantities of the low value good or defining practical, transferable ownership of an indivisible or immobile object. The authenticity and quantity of the good should be readily ascertainable to the users so that they can easily agree to the terms of an exchange.

Trying to use a non-recognizable good as money produces transaction costs of agreement on the authenticity and quantity of the goods by all parties to an exchange. The value that people place on a good in terms of the other goods that they are willing to trade should be relatively constant or increasing over time. A good whose value varies widely up and down over time, or consistently loses value over time is less suitable.

Trying to use a non-stable good as money produces transaction costs of repeatedly revaluing the good in each successive transaction and the risk that the exchange value of the good might drop below its other direct use-value or not be useful at all, in which case it will no longer circulate as money.

As stated above, money primarily functions as a medium of exchange. However, it also has developed secondary functions that derive from its use as a medium of exchange. These other functions include: 1 a unit of account, 2 a store of value, and 3 a standard of deferred payment.

Due to its use as a medium of exchange for both buying and selling and its use to assign prices to all kinds of other goods and services, money can be used to keep track of the money gained or lost across multiple transactions, and to compare money values of various combinations of different quantities of different goods and services mathematically.

This makes things such as accounting for profit and loss of a business, balancing a budget, or valuing the total assets of a company all possible.

Because money's usefulness as a medium of exchange in transactions is inherently future-oriented, it provides a means to store value obtained through current production or trade for use in the future in the form of other goods and services. In particular trading their non-fungible, non-durable, non-portable, non-recognizable, or non-stable goods or services for money here and now, people can store the value of those goods to trade for goods at other times and places.

This facilitates saving for the future and engaging in transactions over long distances possible. To the extent that money is accepted as a general medium of exchange and serves as a useful store of value, it can be used to transfer value for exchange use at different times between people through the tools of credit and debt.

One person can loan a quantity of money to another for a period of time to use, and repay another agreed-upon quantity of money at a future date. The stored value represented by the loaned money is transferred from the lender to the borrower in exchange for an agreed quantity of stored value in the future. The borrower can then use and enjoy the value of other goods and services that they can now purchase in exchange for payment at a later date.

The lender in effect is able to loan the current use of real goods and services which he does not himself originally possess to the borrower. The sellers of the goods are able to receive payment for their goods now, instead of loaning the goods directly to the borrower in hope of future return or repayment.

There are several types of money. Money originates as a feature of the spontaneous order of markets through the practice of barter or direct exchange , where people trade one good or service directly for another good or service. In order for a trade to occur in barter, the parties to the exchange must want the good or service that their counter-parties have to offer. This is known as the double coincidence of wants, and it sharply limits the scope of transactions that can occur in a barter economy.

However certain goods in a barter economy will be generally desired by more people in trade for whatever they have to offer in barter. These tend to be goods that have the best combination of the five properties of money listed above. Over time, these special kinds of goods can come to be desired in trade partly for their wide acceptance as a means to overcome the problem posed by the double coincidence of wants in future transactions with others.

Eventually, people can come to desire a good mostly or solely for its use-value in reducing transaction costs in future exchanges. Such a good can then be called money because it is generally recognized by participants in the economy as a valuable good for its use as a medium to indirectly exchange other goods and services between multiple parties.

The physical commodity will still have some other use-value, but the primary use of any source of value has in the market is for its use as money. Historically, precious metals like gold and silver were adopted as these kinds of market-determined moneys.

Sometimes a market-determined money is officially recognized as legal money by a government. Under some circumstances, goods that do not necessarily meet the five properties of optimal market-determined money outlined above, can be used to fulfill the functions of money in an economy.

Typically this involves a legal mandate to use a specific good as money known as a legal tender law or some kind of prohibition on the use of money such as the use of cigarettes as a medium of exchange among prison inmates. Legal tender laws specify a certain good as legal money, which courts will recognize as a final means of payment in contracts and the legal means of settling tax bills. By default, the legal tender will typically be used as a medium of exchange by market participants within the political jurisdiction of the authority that declares it to be money.

The term fiat money or fiat currency is generally associated with a classification of money that has been authorized for use by a country's government. Legal tender laws do not always adopt market-determined money as legal tender.

A new medium of exchange that does not serve any original non-money use as an economic good can be imposed to replace market-determined money by legal declaration. This type of legal tender can also be called fiat money. Fiat money becomes a medium of exchange through legal imposition on the market, rather than through the process of adoption by the market for easing transactions. Fiat money often does not meet the general characteristics of money and the market-determined money that it replaces.

Because the fiat money tends to be less suitable for use as money, market participants may be reluctant to adopt it as money. Prohibitions or even confiscation of market-based money are sometimes enacted as part of legal tender laws that impose fiat money on an economy. Fiat moneys can lead to increased economic transaction costs, market distortions, and unintended consequences to the extent that they do not meet the characteristics that make a particular good suitable to serve as money.

For example, in modern times, most countries' legal tender moneys consistently lose value over time, sometimes rapidly, leading to the social costs associated with inflation. Governmental currencies fall under the category of fiat money. Internationally, the International Monetary Fund and World Bank serve as global watchdogs for the exchange of currencies between countries. A governmental currency will have an intranational value and an international value.

Established governmental currencies trade 24 hours a day seven days a week on the foreign exchange market, which is the largest financial trading market worldwide. Governments can establish formal and informal trade relations to peg currency values to one another for reduced volatility. Governmental currencies may also be free-floating. Money Substitutes and Fiduciary Media. Physical units of currency cash can circulate from hand to hand in the course of economic transactions, or by being reassigned from person to person for accounting purposes while being held on deposit at a bank or similar institution.

In the second case, tokens or paper notes that substitute for and represent the deposited money are passed from person to person in daily transactions and settled later by financial institutions. Paper notes and checks are examples of these kinds of money substitutes.