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wealthy and have a lot of money but no income. This is another distinc-
tion to be careful with. Do not say that “Sam makes a lot of money” if you
mean that Sam has a high income. Money has a very precise denition in
economics!
Economic functions of money
Money is generally considered to have three economic functions:
A medium of exchange. This is its most important role. Without money
we would live in a barter economy where we would have to trade goods and
services for other goods and services. If I had sh but wanted bread, I would
need to nd someone who was in the precise opposite situation. In a mon-
etary economy I can trade sh for money with one individual and money
for bread with another. Money solves what is called the double coincidence
of wants.
A unit of account. In a monetary economy, all prices may be expressed
in monetary units, which everyone may relate to. Without money, prices
must be expressed in units of other goods and comparing prices are more
difcult. You may nd that a grilled chicken costs 2 kilos of cod in one
place and 4 kilos of strawberries in another. Finding the cheapest grilled
chicken is not easy.
Store of value. If you are a sherman and have a temporary surplus of
sh that you want to store for the future, storing the sh might not be a great
idea. Money, on the other hand, stores well. Other commodities, such as
gold, have this feature as well.
Task 1. Match the synonims.
1. todene
2. to supply
3. to purchase
4. to borrow
5. to exchange
6. to trade
a) to barter
b) to lend
c) to describe
d) to provide
e) to buy
f) to sell
g) to take
133
– The amount of effort (hours or days) required to complete the task.
– The resource (who will carry out the task).
Once you have established the amount of effort for each task, you can
work out the effort required for each deliverable, and an accurate delivery
date. Update your deliverables section with the more accurate delivery
dates.
At this point in the planning, you could choose to use a software package
such as Microsoft Project to create your project schedule. Alternatively, use
one of the many free templates available. Input all of the deliverables, tasks,
durations and the resources who will complete each task.
A common problem discovered at this point, is when a project has an im-
posed delivery deadline from the sponsor that is not realistic based on your
estimates. If you discover that this is the case, you must contact the sponsor
immediately. The options you have in this situation are:
– Renegotiate the deadline (project delay).
– Employ additional resources (increased cost).
– Reduce the scope of the project (less delivered).
Use the project schedule to justify pursuing one of these options.
Step 4: Supporting plans
This section deals with plans you should create as part of the planning
process. These can be included directly in the plan.
Human resource plan
Identify by name, the individuals and organizations with a leading role in
the project. For each, describe their roles and responsibilities on the project.
Next, describe the number and type of people needed to carry out the
project. For each resource detail start dates, estimated duration and the
method you will use for obtaining them.
Create a single sheet containing this information.
Communications plan
Create a document showing who needs to be kept informed about the
project and how they will receive the information. The most common
mechanism is a weekly or monthly progress report, describing how the
project is performing, milestones achieved and work planned for the next
period.
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