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  • Money & Money Function: Unit Iii

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    Shubham Sarkar
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    Economists define money as something that serves as a medium of exchange, a unit of accounting, and a store of value. Money functions as a medium of exchange, allowing transactions, and as a standard of value. Additional functions include being a means of deferred payment and storing value. Money is important for consumers, producers, facilitating trade, and enabling specialization and division of labor. However, money can also lead to issues like economic cycles, overcapitalization, and inequality. Good money materials exhibit properties such as utility, portability, durability and stability of value.

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    11 Unit III Money

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    Economists define money as something that serves as a medium of exchange, a unit of accounting, and a store of value. Money functions as a medium of exchange, allowing transactions, and as a standard of value. Additional functions include being a means of deferred payment and storing value. Money is important for consumers, producers, facilitating trade, and enabling specialization and division of labor. However, money can also lead to issues like economic cycles, overcapitalization, and inequality. Good money materials exhibit properties such as utility, portability, durability and stability of value.

    Copyright:

    © All Rights Reserved
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    12 visualizzazioni17 pagine

    Money & Money Function: Unit Iii

    Caricato da

    Shubham Sarkar
    Economists define money as something that serves as a medium of exchange, a unit of accounting, and a store of value. Money functions as a medium of exchange, allowing transactions, and as a standard of value. Additional functions include being a means of deferred payment and storing value. Money is important for consumers, producers, facilitating trade, and enabling specialization and division of labor. However, money can also lead to issues like economic cycles, overcapitalization, and inequality. Good money materials exhibit properties such as utility, portability, durability and stability of value.

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    © All Rights Reserved
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    di 17

    MONEY &

    MONEY FUNCTION
    U NI T II I
    MONEY
    DEFINITION

    • Economists, however, have a


    language all their own when it comes
    to money. They define it as something
    that serves as a medium of exchange,
    a unit of accounting, and a store of
    value. Money is a medium of
    exchange in the sense that we all
    agree to accept it in making
    transactions.
    FUNCTIONS OF MONEY

    • Primary
    • Secondary
    • Contingent
    PRIMARY FUNCTIONS

    • Money as a medium of exchange


    • Money as a standard of value
    SECONDARY FUNCTIONS

    Deferred payment
    Store of values
    Transfer of value
    CONTINGENT FUNCTION

    • Distribution of social income


    • Equalisation of marginal utility in
    expenditure
    • Basis of credit system
    • Imparting of a general form of capital
    OTHER FUNCTIONS

    • Money as a liquid Assets


    • Bearers of options
    KINDS OF MONEY

    • Nature of money :
    • Actual money
    • 1. Commodity of Money
    • 2. Representative of money :
    • A Convertible Money
    • B. Inconvertible Money
    MATERIAL USED

    • Metallic Money
    • Paper Money
    LEGALITY

    • 1 Legal Tender Money :


    • A Unlimited legal tender money
    • B. Limited Legal money
    • 2. Optional money
    STATUS

    • Standard Money
    • Token Money
    • Optional Money
    CLASSIFIED

    • Classical Approach
    • Money + Currency = Demand Deposit
    • Chicago Approach
    • Money + Currency+ Demand Deposits
    + Time Deposits
    • Non Banking intermediaries
    • Money = Currency+ Demand Deposit
    + Time Deposit+ NBI – Debenture,
    Saving bank Share Bonds
    • Central Banking or Redcliff Approach
    • Money = Currency+ Demand Deposit +
    Time Deposit+ NBI – Debenture, Saving
    bank Share Bonds + Credit from un-
    Organised Sectors.
    IMPORTANCE OF MONEY

    • To the consumer
    • To the producer
    • Money has made specialisation and division of
    labour possible
    • Money eliminate the drawback of the barter
    system
    • Money facilitates trade
    • Importance of distribution
    • Significance of public finance
    • Money makes material progress possible
    EVILS OR DEFECTS OF MONEY

    • Money given birth to trade cycle


    • Money encourage over capitalization
    • Lack of stability of value of money
    • Money strengthens economic inequalities
    • Moral depravity
    • Money trends become a master
    GOOD MONEY MATERIAL

    • Utility
    • Portability
    • Durability
    • Divisibility
    • Homogeneity
    • Stability of value
    • Acceptability
    • Elasticity

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