Development of the Circulation of Money

During the ancient time….

• Barter system- Goods and services are traded in exchange for other good.

Money Economy

Money• medium of exchange• is commonly accepted by a group of people for the exchange of goods, services, or resources. Every country has its own system of coins and paper money.

Money economy• Where goods and services are paid in currency or money

Money Economy

Paper money is invented in

China.

The Lydians became the first in the Western world to make

coins.

To commemorate the Centennial of Independence from more than 300

years of Spanish colonial rule in 1998, the government of the

Philippines wanted to do something very special. It issued the world's largest banknote (14" x 8 1/2"),

beating the previous record: China Ming Dynasty 1 Kuan (8 3/4" x 13

1/4").

Transactions by Households and FirmsHOUSEHOLDS FIRMS

Owns factors of production, including labor, which they supply to firms

Use factors of production supplied by households to produce goods and services

Receive incomes from firms in exchange for supplying factors of production

Pay households for use of factors of production

Spend on goods and services produced by firms

Sell goods and services to households

Includes the entire population of society

Provideconsumers with goods and services

Exists when people who are willing to work cannot find jobs

Firms hire productive services from households. They do this to make profit by selling the goods and services they produce to households

firms cannot sell all the goods they are producing

They cut back on production and reduce their work force

People lose their jobs and become unemployed

Inflation • is defined as an increase in the general

price level

Growth

• Occurs when unemployed resources are put back to work and when there is increased flow of goods and services from firms to households and increased flow

of income to households

Entrepreneurship on the context of small and medium-scale industries and its role in economic growth

Micro Less than- 50,000php

Cottage 50,001php- 500,000php

Small 500,001php- 5,000,000php

Medium 5,000,001php- 20,000,000php

Various Business Opportunities in the Community

Business opportunities are everywhere as long as there are people with money, and they are willing to satisfy their needs.

Real entrepreneurs can see more business opportunities because they are creative, resourceful and risk-takers.

They create opportunities instead of waiting for opportunities to come

Factors /resources to be evaluated for higher probability of success:

Markets

•Number of prospective buyers•Presence of competitors•Prices •Quality of goods and services

Individual Interests•Business interests of individuals vary•Interests should match opportunities

Capital

• Money is very important in putting up a business.

• The availability of funds should fit the type of business to be organized.

Skills

• The entrepreneur should have the proper skills in the business he is going to undertake

Suppliers of Inputs

• It is important that there are steady suppliers of raw materials and other inputs of the business.

• If there is no materials to be used in production, then nothing will be produced

Manpower

• People are the most important resources.• The success of any business depends on the

efficiency of its employees

Technology

• Tastes and preferences of consumers are not permanent. These are heavily influenced by innovations.