Types of Money

In: Business and Management

Submitted By cadylorenzana
Words 340
Pages 2
Palo, Princess Joy D. Finance
BSBA 3-1
TYPES OF MONEY: 1. Commodity Money:
Whenever any commodity is used for the exchange purpose, the commodity becomes equivalent to the money and is called commodity money. There are certain types of commodity, which are used as the commodity money. Among these, there are several precious metals like gold, silver, copper and many more. Again, in many parts of the world, seashells (also known as cowrie shells), tobacco and many other items were in use as a type of money & medium of exchange.

2. Fiat Money:
The word fiat means the "command of the sovereign. It is the type of money that is issued by the command of the sovereign. The paper money is generally called as the fiat money. This type of money forms a monetary standard. It has been made mandatory by law to accept the fiat money, as an exchange medium, whenever it is offered to anyone.

3. Fiduciary Money:
Today's monetary system is highly fiduciary. Whenever, any bank assures the customers to pay in different types of money and when the customer can sell the promise or transfer it to somebody else, it is called the fiduciary money. Fiduciary money is generally paid in gold, silver or paper money. There are cheques and bank notes, which are the examples of fiduciary money because both are some kind of token which are used as money and carry the same value.

4. Commercial Bank Money:
Commercial Bank money or demand deposits are claims against financial institutions that can be used for the purchase of goods and services. A demand deposit account is an account from which funds can be withdrawn at any time by cheque or cash withdrawal without giving the bank or financial institution any prior notice. Banks have the legal obligation to return funds held in demand deposits immediately upon demand (or 'at call'). Demand deposit withdrawals can be…...

Similar Documents

Money

...Money Tumeka Smith Dec.14, 2012 Jason Friedline XECO210 Medium of exchange is an item that buyers give to sellers when they purchase goods and services(The Monetary System). Retailers’ sale their services or products, and money in exchanged for it that’s a medium of exchange. When I need groceries I go shopping. I like to shop for groceries at Food Lion or Wal-Mart. The groceries that I purchased are a medium of exchange. Money was transferred from me “the buyer” to the seller for the good I needed. A monetary transaction was made when I bought the groceries. A unit of account is the yardstick people use to post prices and record debt(The Monetary System). School loan are a good example of unit of accounts. My loan repayment amount wasn’t determined by the quantity of goods and service but, by dollars. This is how financial aid would measure my record of economic value. A store of value is an item that people can use to transfer purchasing power from the present to the future (The Monetary System). An example of a store of value would be stocks. Stock broker are usually given money to make future purchase stocks for the buyer. The stock broker will hold the buyers money for future purchases when they see fit to buy the appropriate stock. The stock broker holds all the power to purchase the stocks for their client. Traders also use store of value. Traders may exchange goods for money or nonmonetary assets, and hold them for future purchasing......

Words: 266 - Pages: 2

Money

...Money Is an essential commodity that helps you run your life. Money has gained its value because people are trying to save wealth for their future needs. Philosophically speaking, money cannot buy everything but practically money is the basic thing that is used for calculating the status of any person. Money is a good servant but a bad master. You should be fond of money to an extent that you are controlling it. There are many ways to earn money, but to sustain your wealth you have to handle your own money. Rich people are rich because they know the true value of money and hence they manage their business. It is generally said that money will stay in the hands of people who know its value. If you are a lavish spender spending money in unnecessary ways, you will soon lose all your wealth. Hard work and commitment is essential if you want money to stay in your hands. If you have money, signs of poverty will never approach you and you can maintain your health even though you cannot rule your health. There are many people in this world who want money without working hard. Some of them are successful in their goal but the true legitimate way to earn money is to work hard. You should use the money for solving your financial problems but you should be careful that your money does not transform you into a different person. If you have money, rather than spending it in satisfying luxurious desires you can try investing it. Money when invested has the ability...

Words: 305 - Pages: 2

Money

...Money is one of the most important elements of economic science. It is truly a great invention for man. Every body is familiar with it and uses it in one form or the other. Although in final analysis, it is the real goods and services, which can satisfy our wants, but money is the intermediary. It is through money that we get access to goods produced by others. Money is running through economics system as blood is running in our body. In a way, money is much simple a nod common thing that even a child of two or three knows that money should be obtained and spent. But it is very difficult to define it. It may be defined as “Money is anything that we widely used in payments of debts” “Any thing which is widely accepted in payment for goods or in discharge of other kinds of obligations” (Robertson) “Money is the modern medium of exchange and the standard unit in which prices and debts are expressed.” (Samuelson) From the above definitions it is easy to conclude that money is any, material, which is commonly accepted and generally used as a medium if exchange for all types of transactions. Thus all kinds of currency notes and coins plus cheque deposits, etc can be regarded as money. FUNCTIONS The moneys primary functions are • Medium of exchange • Measure of value • And store of value MEDIUM OF EXCHANGE Money is used as an intermediary for trade, in order to avoid the inefficiencies of a barter system, which are sometimes referred to as the 'double......

Words: 1455 - Pages: 6

Money

...THE HISTORY OF MONEY In the beginning, there was no money. 1. Self-sufficiency: families produced what they consumed and consumed what they produced. 2. There was no need for exchange. 3. No exchange meant no need for money. The advent of specialization spurred exchange, which led to the earliest barter systems. BARTER Barter is defined simply as good-for-good exchange. There are two main difficulties with barter. 1. Double coincidence of wants: • Occurs when traders are willing to exchange their products for what others are selling. • It’s a single coincidence if I’m willing to exchange my apples for your oranges; it’s a double coincidence if you too are willing to exchange your oranges for my apples. 2. Rate of Exchange: • The rate at which bartered goods are exchanged • How many apples per orange, for example. Arrived at during negotiations between the two bartering parties; these negotiations are transaction costs because they take time which might otherwise have been used better (opportunity cost) As the economy became more complex, with more producers and more consumers, barter became increasingly cumbersome. Number of goods produced and exchanged increased, so the negotiation of exchange rates became increasingly complicated, as there was no common measure of value. ADVENT OF MONEY Money was designed to solve the problems that arose from the earliest barter systems. Money is anything that is generally accepted by custom or......

Words: 952 - Pages: 4

Money

...consummate professionalism. Even if it hurts , describe your own firing – candidly, succinctly and without a trace of bitterness – from the company’s point-of-view, indicating that you could understand why it happened and you might have made the same decision yourself. Your stature will rise immensely and, most important of all, you will show you are healed from the wounds inflicted by the firing. You will enhance your image as first-class management material and stand head and shoulders above the legions of firing victims who, at the slightest provocation, zip open their shirts to expose their battle scars and decry the unfairness of it all. For all prior positions: Make sure you’ve prepared a brief reason for leaving. Best reasons: more money, opportunity, responsibility or growth. The "Silent Treatment" Like a primitive tribal mask, the Silent Treatment loses all it power to frighten you once you refuse to be intimidated. If your interviewer pulls it, keep quiet yourself for a while and then ask, Visit http://TechPreparation.com for more Interview Questions with Answers Page 5 with sincere politeness and not a trace of sarcasm, “Is there anything else I can fill in on that point?” That’s all there is to it. Whatever you do, don’t let the Silent Treatment intimidate you into talking a blue streak, because you could easily talk yourself out of the position. Why should I hire you? By now you can see how critical it is to apply the overall strategy of uncovering......

Words: 11553 - Pages: 47

Money

...Forgan need to identify what resources will be needed. The resources include time, information, money, staffs. * They should discuss with employees and give ideas to complete the tasks. Employees are encouraged to investigate the best practice for their activity and only to find out what is achieved but also to discover how it can be achieved. * Set out the criteria to assess the performance of the tasks. Mark, Forgan and colleagues should give a standard for performance. They need the agreement about how success will be measured and how often. * Provide feedback and direction during the process to ensure the tasks will complete successfully. Mark and Forgan need to ask employees to summit the report After all, the staff will be able to understand all the tasks and responsibilities and the leaders can learn about the strengths and weaknesses of the staff to be delegation appropriate. 4c. Review development needs and activities and evaluate the effectiveness of activities carried out by individuals and teams There is a lot format of review. Mark and Forgan can use one of formats like feedback such as upward appraisal, and appraisal interview to gets staff’s opinion (what they like, want, hate in organization) for management way, environment, distribute work way and opinion among colleague. This one’s is split two types motivation feedback and development feedback .The two types of feedback support for Mark and Forgan to improve manage way and satisfy something......

Words: 4002 - Pages: 17

Money

...Money Donnie Stidham XECO212 November 27, 2010 Sara Sheikh Money As a unit of account, money may serve its most useful purpose. Money can easily be divided into smaller units of measure without losing any value, which allows for a more efficient system of trading. There is no difference in value from a $100 dollar bill and ten $10 dollar bills. The consistency of a dollar as a unit of account in terms of every dollar has the same value regardless of situation; its interchangeable qualities also enhance efficiency and access. The barter system has many faults and inefficiencies that bring about a need for a more effective means of trade. Money seems to serve the purpose as a medium of exchange between people. Money is a credible, reliable, and documentable means of transacting. Specialization within the labor markets add to the need for such a medium of exchange as bartering specific skills or products for other skills or products has many counterproductive attributes. As a store of value, money must have the trust of the people utilizing it as a respectable manner of trade and the value stays consistent. Money must maintain a given value, although some degree of devaluing may occur and be accepted as common [inflation]. Money has lost some of its value in terms of storing for future use because many other methods may serve a better, more efficient means of storing. Storing money in a pillow is less efficient than in an account drawing interest, or......

Words: 383 - Pages: 2

Money Money Money

...How Record Companies Make Money By Diane Rapaport Record companies make money by selling recordings. It is a high-risk business. According to the Recording Industry Association of America (RIAA), approximately 90% of the records that are released by major recording labels fail to make a profit. Independent labels have to be more careful in their choices and in their allocation of expenses because they do not have the resources to cover many failures. However, they can make and promote records for far lower costs than major labels and be profitable with far fewer sales. The budgets for making and selling recordings are tied to what labels estimate they will sell. Knowing how many recordings might be sold makes it possible to budget recording costs. Most profitable labels have histories of selling and promoting that enable them to estimate gross income. Recording Costs Recording costs are borne by artists, not record companies. Record companies commonly make loans to artists (all-in advances) for these costs and recoup them from royalties. With the exception of jazz and classical artists, new major label artists can spend between $100,000 and $500,000 to make a record, but recording budgets of one million dollars and more are not uncommon. Many independent artists will spend less than $15,000. Manufacturing Costs Manufacturing includes replicating recorded material and packaging. The costs depend on the number to be manufactured. Manufacturing costs...

Words: 835 - Pages: 4

Money

...What Is Money and Why Do We Need It? Lesson Plan #1b: The Many Forms of Money Lesson Plan #1c: Plastic Payment Lesson Plan #1d: Smart Cards Lesson Plan #1e: Paying On the Internet Lesson Plan #2: An Experiment in Barter Exchange Lesson Plan #3: How Do You Pay? Lesson Plan #4: How Do You Pay? The Evolution of Money Instructor’s Note: The first five lesson plans (#1a through #1e) are designed as a modular set to be used together. They consist of a series of discussions covering various parts of the video. You may use them in several ways. One is to alternate between discussions and watching segments of the video. There are three pause points on the video. The discussions are designed to fit with these points. The first lesson (#1a) fits before the video begins; lessons #1b through #1d fit well at the three pause points; and the final one (#1e) fits best at the end of the video segment. Alternatively, the video can be viewed without interruption and the discussions divided between topics to be discussed before and after viewing. No continuity will be lost if some discussions are skipped. Because much of this material may be unfamiliar to teachers, each of the lessons has an extended presentation of background information for teachers. This information, along with additional materials from the references cited in the section called “For More Information,” should help you to be an informed discussion leader. Lesson Plan #1a: Grade Level: Time Required: What Is Money and Why......

Words: 11615 - Pages: 47

The Money

...years to foster interactive education, save money on books, and ensure classrooms in the US use up-to-date content.” E-textbooks on tablets cost on average 50-60% less than print textbooks. A recent study shows that the price of tablets will drop drastically in the upcoming years Tablets cost on average $489 in 2013, $386 in 2014, and are projected to cost $263 in 2016 so it would be a perfect time for schools to pick up tablets for their students. According to a 2012 report from the Federal Communications Commission, K-12 school districts spend more than $8 billion per year on textbooks. E-textbooks can save schools between $250-$1,000 per student per year, the better choice would be to go with E-textbooks than actual print textbooks. Although many might say tablets have too many distractions for classroom use, That students may pay attention to apps, email, games, and websites instead of their teachers that is in fact not true there is a setting where you can block all others apps and websites that is not school related. Also if the tablets are a group share the head or teacher can see what everything students are doing without having to change the page. Others say that using a tablet takes away the focus of concentrating on the task at the hand but a study published this past spring by a couple of top students from the Chinese University of Hong Kong says otherwise. It state that “ that those who frequently use different types of med...

Words: 510 - Pages: 3

Money

... I think that if the government spends, or invests, more money on programs and actions that will bring more jobs, therefore, more income to the people and the country itself, the country’s real GDP would increase. The way I see it is that if more people have jobs, the country’s output would be a lot greater thus the country’s real GDP would be higher. All this can happen only and only if, the government spends money on the right programs that will create more jobs and more money. As we all know, these programs might be the right ones for the economy to improve; however, the program’s outputs (economic growth) might not be seen right away by the country. In these cases the good thing is that the programs will help the economy in the future. Basically, it will pave the road for the economy to keep improving. I think of these ones, as long run investments. Either way, as long as the money is spent on the right things, the outcome will be noticeable right away or it will help on the improvement for the future. One of these examples is the solar panels that produce energy. These last years we have seen an increment on houses that have those panels. WHY? The government gives out tax rebates to people who own them. Also, those people will pay a lot less every month on the electric bill, plus it helps the environment and it creates more jobs. This government incentive creates more and more people to get them thus the money keep flowing, which helps the economy. The second reason...

Words: 463 - Pages: 2

Money

...[pic] MONEY Income – доход Earned income – заработок Unearned income – рента, нетрудовые доходы Private income – частные доходы To live on one’s income – жить на свои средства To live within/ up to one’s income – жить по средствам Exceed/ live beyond one’s income - жить по средствам Income tax – подоходный налог Salary – оклад, зарплата To gross (coll) – we grossed 1,000$ - мы получили общую прибыль в … Payment – оплата, платеж, уплата Overtime payment – плата за сверхурочную работу He made a cash payment of 50$ - он уплатил наличными 50$ Pay – плата, зарплата, жалование; платить A pay cut – снижение зарплаты A pay increase – повышение зарплаты On half pay – на полставки They are paid by the hour - они получают почасовую оплату He paid his way through college – он сам зарабатывал себе на обучение To pay off one’s debts – рассчитываться с долгами Pay-day – день зарплаты Bonus – премия, премиальные A bonus job – работа с премиальным вознаграждением Royalties – авторский гонорар, отчисления автору пьесы Wages – заработная плата He gets good wages - он хорошо зарабатывает A living wages – прожиточный минимум Tips – деньги на «чай» Commission – комиссионные Basic earnings – основной доход, заработок Extras – дополнительный доход College grant - стипендия Scholarship - стипендия Child benefit – детское пособие Maternity benefit – пособие по беременности и родам Pension - пенсия Dole......

Words: 23644 - Pages: 95

Money

...The History of Money THE HISTORY OF MONEY From Its Origins to Our Time This was the final draft of the English text of "Une Histoire de l’Argent: des origines à nos jours" - www.autrement.com/ouvrages.php?ouv=2746710306 - published by Autrement in Paris in November 2007 with a few minor changes in the final French text. I am very grateful to Philippe Godard - www.autrement.com/collections.php?col=277 for his editorial support, and to Autrement for allowing me to make the English version accessible here. INTRODUCTION This book is about the history of money: how did it begin? how has it evolved to the present day? what has it enabled humans to achieve? and why do so many people in the world today have problems with it and suffer from the way it works? The book is also about the future: how may money develop further? how might we want it to develop? Humans are the only creatures that use money. Animals and birds and insects and fishes and plants exist together in the world without it. But in human societies the earning and spending of money has become one of the most important ways we connect with one another. Most of us have to have money. We need to get enough coming in to match what we need to pay out. We all need to understand at least that much about money. But there is more to it than that. Over the centuries, money has reflected changes in politics and government, in economic life and power, in science and technology, in religious and other cultural beliefs, in family......

Words: 12180 - Pages: 49

Money

...Money Money has three functions which are unit of account, medium of exchange, and a store of value. Unit of account is the money function in which money is used as the common benchmark to designate the prices of goods and exchange throughout the economy. Unit of account also known as measure of value means that money is the measuring unit for prices. For example a 1 liter bottle of soda costs $2 and a 2 liter bottle of soda costs $3.75. You understand this and are able to compare the prices. Money is used in exchange for the price of goods. Price is how much money is needed to complete the exchange of the goods in interest. The next function of money is medium of exchange. This function is the function of money being excepted as payment for goods and services. Buyers get their purchased goods by giving money to the seller. The seller receives money for trade of their goods. For example a person wanting a bag of chips gives the seller money for the price of the chips. The seller receives the money in trade for the price of the chips. Money is a material that is commonly accepted as a medium of exchange. This medium of exchange takes place of the past barter system. The last function of money is store of value. This function means that money can be used to purchase the exact same goods in the future as it can today. Once a person receives a paycheck the money that that person does not spend is place into a savings. By saving money you are able to......

Words: 289 - Pages: 2

Money, Money, Money

...MONEY Like it. Loathe it. Want it. Waste it. But you just cannot ignore it. That is “money”. According to Wikipedia, money is “any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context”. Money was developed according to man’s needs and requirements. In the beginning, there was no money. People engaged in barter, “the exchange of good or service for another good or service” (Steven Cobb, 2007, page 1), without value equivalence. For instance, a bag of salt is exchanged for a bag of tea. However, since the items most traded were commodity products, the barter system posed several problems such as product storage, shelf life, durability, transportation and divisibility problems. The frustrations of people in the barter system soon led them to the creation of money. There are those who believe that the earliest forms of money were the Cowry shells and have been traced back to China in 1200 B.C. Then metallic money used as a mode of payment and was then made of gold, silver, copper or nickel because these were more durable, portable and easily divisible than Cowry shells. However, the problem of measuring its weight and value arose when the metals were not used as coin but as bullion. Additional problems such as inconsistent supply when mines were fully used, transportation and storage problems were also present. Eventually these soft metals were alloyed to cheaper...

Words: 758 - Pages: 4

Onur Yaprakçı | Sonuncu Sayfa | Merc Storia: Mukiryoku no Shounen to Bin no Naka no Shoujo