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On Money

Money is defined as anything that is universally accepted as payment for goods, services, and debts. There are different types of money including cash, checks, credit cards, and digital currencies. Money serves important functions as a medium of exchange, store of value, and unit of account. While money is important for facilitating trade and economic transactions, it can also lead to disadvantages like instability of value and unequal distribution of wealth if not properly managed.

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Sagar Don
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407 views11 pages

On Money

Money is defined as anything that is universally accepted as payment for goods, services, and debts. There are different types of money including cash, checks, credit cards, and digital currencies. Money serves important functions as a medium of exchange, store of value, and unit of account. While money is important for facilitating trade and economic transactions, it can also lead to disadvantages like instability of value and unequal distribution of wealth if not properly managed.

Uploaded by

Sagar Don
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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MONEY

Money

 Content
1. Definition of money
2. Types of money
3. Characteristics of money
4. Functions of money
5. Importance of money
6. Disadvantages of money
Definitions of Money

 There is no commonly acceptable definition of


money
 Some define money as anything acceptable I
payment of goods and services or in settlement of
debt.
 Some say money is anything that performs the
function of medium of exchange, measure of value
and store of value .
Money

 Money
 Any medium that is universally accepted
in an economy both by sellers of goods and services and by
creditors as payment for debts

15-4
Table 15-1 Types of Money

15-5
Characteristics of Money

 General acceptability
 Voluntary Acceptability
 Medium of Exchange
 Money is a mean not an end
 Government control
 Liquid Asset
 Money is not a veil
Functions of Money

 Functions of Money

Primary Functions Secondary Functions


Static and Dynamic
function
Contingent
Functions
Functions of money

Primary Functions Secondary Functions

 Medium of  Standard of
Exchange Deferred
 Measure of Payments
Value  Store of Value
 Transfer of
value
Functions of Money

Static and Dynamic


Contingent Functions
Functions

 Basis of Credit Creation  Static Functions


 Maximum Satisfaction  Dynamic functions
 Distribution of
National Income
 Bearer of option
 Guarantee of Solvency
 Increase in the
liquidity of capital
Importance of Money
Direct importance in the Indirect importance in the
field of Economics field of Economics

 In consumption  Freedom from barter


 Solution of Central
 In production Economic problems
 In exchange  Basis of Credit
 Index of Economic
 In trade Development
 In distribution  Increase in mobility of
capital
 In public finance  Measure of social welfare
 Capital formation  National and international
unity
Disadvantages of Money

Economic Evils Social Evils

 Instability of value  Encourages


 Trade cycles materialism
 Over- Capitalization  Tendency of
 Economic wastage
Exploitation
 Increase in immoral
 Unequal distribution of
wealth tendencies
 Problem of black
money

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