The document discusses the origins and evolution of money. It begins by explaining that money is a human invention that represents the value of goods and services, and requires social acceptance. Throughout history, various commodities have served as money, including livestock, grains, shells, metals, and paper. The document then outlines the development of commodity money, representative money like receipts, paper currency, and finally fiat currency not backed by commodities. It also discusses non-monetary exchange through barter and gift economies, and criticisms of theories about the origins of money replacing barter.
Monetary policy aims to control the money supply and interest rates to promote economic growth and stability. The objectives of monetary policy differ for developed and underdeveloped countries. Underdeveloped countries aim to achieve full employment and economic growth, while developed countries focus on high demand without inflation. Monetary policy tools include open market operations, required reserves, and interest rates. Central banks target variables like money supply and interest rates to indirectly influence macroeconomic goals like inflation and growth. The State Bank of Pakistan has utilized tight and easy monetary stances over the years in response to economic conditions, aiming to balance objectives like inflation, growth, and stability.
This presentation introduces money and the financial system. It defines key components of the financial system including financial instruments, financial markets, financial institutions, and central banks. It then outlines the five core principles of money and banking: 1) Time has value, 2) Risk requires compensation, 3) Information is the basis for decisions, 4) Markets determine prices and allocate resources, and 5) Stability improves welfare. Each principle is briefly described.
Commercial banks engage in credit creation by accepting primary deposits from customers and using some of those deposits to issue loans and advances, thereby creating derivative deposits. This process of using deposits to issue loans that themselves generate further deposits allows banks to multiply the money supply through the fractional reserve system. As shown through examples of Banks A, B, and C, each new loan issued creates a new deposit, with the amount of deposits and loans growing until reserves become too small to support additional lending.
Money supply is determined by the central bank and commercial banking network. It impacts macroeconomic conditions and interest rates. There are four measures of money supply but M3, which includes time deposits and savings deposits, is most widely used. Factors like bank credit, government spending, and foreign exchange reserves can increase money supply. While central banks can print money, uncontrolled printing will devalue the currency. Commercial banks create credit through the deposit multiplier process, where an initial deposit can expand into multiple new deposits through a series of loans and redeposits, limited by reserve requirements.
Restatement of quantity theory of moneyNayan Vaghela
Milton Friedman proposed a restatement of the Quantity Theory of Money (QTM) that incorporated permanent real income and wealth. He argued that the demand for money depends on total wealth, expected returns on various assets, and tastes/preferences. Friedman defined permanent real income as the sustainable level of income without reducing wealth over time. His equation for the QTM included factors like the money stock, the price level, permanent income, expected rates of return on different assets, and other variables. While improving on prior theories, Friedman's restatement still had limitations like subjective terms that are hard to measure and challenges maintaining a steady money supply in a modern economy.
This document discusses the problem of debt servicing for developing countries. It provides an overview of what debt is and outlines some of the root causes of debt crises, such as rising indebtedness from the 1970s-1980s due to economic policies. Debt servicing ratios above 15% of yearly export earnings can cause problems. International debt levels for low and middle income countries decreased 18% in 2014. The document also examines debt issues specifically for India, including an unmanageable accumulation of debt and increased foreign borrowing by large corporations.
This document discusses the role of money in the economy, including:
1) Money creation and different monetary systems like fractional reserve banking.
2) The demand for money which includes transactions, precautionary, and speculative motives.
3) How governments control money supply and demand through monetary policy tools like interest rates.
4) The classical view that only real factors like output affect wealth, while money is neutral, versus Keynesian views of uncertainty.
5) How the real sectors of output and financial markets interact with the monetary sector through the quantity theory relationship of MV=PY.
Meaning, definition, nature, scope, importance and limitation of macro econo...Ashutosh Deshmukh
The document provides an overview of macroeconomics concepts taught by Dr. Ashutosh A. Deshmukh. It defines macroeconomics as the study of aggregates and averages covering the economy as a whole, such as total income, employment, output, prices. It discusses key events that influenced the development of macroeconomics like the Great Depression. It also outlines several macroeconomic topics, theories and models covered, including classical employment theory, Keynesian economics, economic growth, and limitations of the macroeconomic approach.
Monetary policy aims to control the money supply and interest rates to promote economic growth and stability. The objectives of monetary policy differ for developed and underdeveloped countries. Underdeveloped countries aim to achieve full employment and economic growth, while developed countries focus on high demand without inflation. Monetary policy tools include open market operations, required reserves, and interest rates. Central banks target variables like money supply and interest rates to indirectly influence macroeconomic goals like inflation and growth. The State Bank of Pakistan has utilized tight and easy monetary stances over the years in response to economic conditions, aiming to balance objectives like inflation, growth, and stability.
This presentation introduces money and the financial system. It defines key components of the financial system including financial instruments, financial markets, financial institutions, and central banks. It then outlines the five core principles of money and banking: 1) Time has value, 2) Risk requires compensation, 3) Information is the basis for decisions, 4) Markets determine prices and allocate resources, and 5) Stability improves welfare. Each principle is briefly described.
Commercial banks engage in credit creation by accepting primary deposits from customers and using some of those deposits to issue loans and advances, thereby creating derivative deposits. This process of using deposits to issue loans that themselves generate further deposits allows banks to multiply the money supply through the fractional reserve system. As shown through examples of Banks A, B, and C, each new loan issued creates a new deposit, with the amount of deposits and loans growing until reserves become too small to support additional lending.
Money supply is determined by the central bank and commercial banking network. It impacts macroeconomic conditions and interest rates. There are four measures of money supply but M3, which includes time deposits and savings deposits, is most widely used. Factors like bank credit, government spending, and foreign exchange reserves can increase money supply. While central banks can print money, uncontrolled printing will devalue the currency. Commercial banks create credit through the deposit multiplier process, where an initial deposit can expand into multiple new deposits through a series of loans and redeposits, limited by reserve requirements.
Restatement of quantity theory of moneyNayan Vaghela
Milton Friedman proposed a restatement of the Quantity Theory of Money (QTM) that incorporated permanent real income and wealth. He argued that the demand for money depends on total wealth, expected returns on various assets, and tastes/preferences. Friedman defined permanent real income as the sustainable level of income without reducing wealth over time. His equation for the QTM included factors like the money stock, the price level, permanent income, expected rates of return on different assets, and other variables. While improving on prior theories, Friedman's restatement still had limitations like subjective terms that are hard to measure and challenges maintaining a steady money supply in a modern economy.
This document discusses the problem of debt servicing for developing countries. It provides an overview of what debt is and outlines some of the root causes of debt crises, such as rising indebtedness from the 1970s-1980s due to economic policies. Debt servicing ratios above 15% of yearly export earnings can cause problems. International debt levels for low and middle income countries decreased 18% in 2014. The document also examines debt issues specifically for India, including an unmanageable accumulation of debt and increased foreign borrowing by large corporations.
This document discusses the role of money in the economy, including:
1) Money creation and different monetary systems like fractional reserve banking.
2) The demand for money which includes transactions, precautionary, and speculative motives.
3) How governments control money supply and demand through monetary policy tools like interest rates.
4) The classical view that only real factors like output affect wealth, while money is neutral, versus Keynesian views of uncertainty.
5) How the real sectors of output and financial markets interact with the monetary sector through the quantity theory relationship of MV=PY.
Meaning, definition, nature, scope, importance and limitation of macro econo...Ashutosh Deshmukh
The document provides an overview of macroeconomics concepts taught by Dr. Ashutosh A. Deshmukh. It defines macroeconomics as the study of aggregates and averages covering the economy as a whole, such as total income, employment, output, prices. It discusses key events that influenced the development of macroeconomics like the Great Depression. It also outlines several macroeconomic topics, theories and models covered, including classical employment theory, Keynesian economics, economic growth, and limitations of the macroeconomic approach.
Money refers to anything that is generally accepted as payment. It functions as a medium of exchange, unit of account, and store of value. Money includes currency, deposits, and other liquid assets. The money supply has evolved from commodity money to various forms like paper currency, checks, and electronic payments. Measuring the money supply includes aggregates like M1, M2, and M3 that capture currencies and increasingly liquid assets.
This document discusses money supply and the banking system. It defines different measures of money supply (M1, M2, M3, M4) and explains how money is created through the banking system. Banks act as intermediaries that accept deposits and create money through lending. This expands the money supply through the money multiplier process. The money supply is determined by factors like public behavior, commercial bank behavior, and central bank influence. The money market reaches equilibrium where the demand for money equals the supply.
This document summarizes the key aspects of monetary policy in Bangladesh. It discusses how the central bank uses interest rates and money supply to influence inflation. However, monetary policy faces limitations in Bangladesh due to imperfect markets and the economy's reliance on imports. The transmission of interest rate changes is also weak as banks determine rates collusively. While price stability is ideal, monetary policy alone has limited impact on inflation in Bangladesh given global price influences and excess bank liquidity reducing the central bank's policy instruments.
The document discusses several theories of interest, including classical, neoclassical loanable funds, modern, productivity, abstinence, Austrian time preference, Fisher's time preference, and Keynes' liquidity preference theories. The classical theory views interest as determined by real factors like savings and investment. The loanable funds theory sees interest set by demand and supply of loanable capital. Modern theory combines monetary and non-monetary factors using IS and LM curves.
Money originated from the Latin word 'MONETO' and can be defined as any commodity that is generally accepted for exchange and as a measure of value. The primary functions of money are as a medium of exchange to purchase goods and services, and as a measure of value to compare the worth of different commodities. Secondary functions include acting as a standard for deferred payments, a store of value for present and future needs, and allowing the transfer of purchasing power across locations.
Monetary policy involves controlling the supply of money in an economy to achieve goals like price stability and economic growth. The central bank implements monetary policy using tools like open market operations, adjusting reserve ratios, and setting interest rates. These tools work through channels like interest rates and credit to influence money supply, inflation, and other macroeconomic variables. Effective monetary policy requires coordination between fiscal and monetary authorities to avoid conflicting policies. The Bangladesh Bank follows an inflation targeting framework and uses reserve money and broad money as targets to achieve its goals of stable prices, growth, and balance of payments.
This document provides an overview of monetary policy in Bangladesh. It defines monetary policy and discusses its objectives, which include rapid economic growth, price stability, exchange rate stability, full employment, and equal income distribution. It also outlines the tools used by Bangladesh's central bank to implement monetary policy, including reserve requirements, open market operations, and interest rate controls. The document then summarizes Bangladesh's monetary policy in 2018 and analyzes the impact of expansionary monetary policy on GDP.
The document discusses the transmission mechanism of monetary policy through four key points:
1. It introduces the transmission mechanism and defines it as the series of links between monetary policy changes and their impacts on output, employment, and inflation.
2. It outlines the session, which will cover the impact of interest rate changes on other interest rates, consumption, and investment.
3. It provides brief definitions and discussions of consumption and investment, and how monetary policy influences them through several channels like interest rates, asset prices, and exchange rates.
4. It notes that monetary policy is likely to influence aggregate demand in various ways and that the relationship between interest rates and aggregate demand is complex, being influenced by expectations and time
this ppt is about metallic standards i.e. silver and gold standards. I hope it helps. IHDSUYFGUKWEFGYGNHSDSFGHGSDJATYKUQWGRMJWHERGJEHRF,AJHKAWGFMGJGFKUERJWEWGRJERYEJGFJHGFLSKAFHLAIWUILWHRQWYKUWHG,AJSGFJHGFKYRWRUWKJWIWOIUQLJGFHD,KALOUWOEIYRIUETIUEGJEH.WEKJRWOEIRUOWILEUIDHF/SLKEJLKFHEIURUWRYIUWYR;WIUEQOUEOQIUIHDA,H,KJHFJDGFHFGAKSJHFSYUEJHRKJEHRIUYKJDS,KJFOIUEJE.KHJGFJDGJHDSUFYEUYRLEIRUIERJSDHFKJDGJDGUDYEHKERIUYERUERUERHFEHFHEDGEWYTRKWERLEURYIUERYUERYEUYRUERYERYBJSCUYBGEYGFNEHJDNEBHJNCEHYEkuwesghjugf,jSGWEGFYYEWGFHNXJWEYUGHEWYDUCGHJNHYUHJYYYYYYYYGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
The document discusses credit control methods used by central banks to achieve objectives like price stability and economic growth. It describes quantitative methods like adjusting the bank rate, open market operations, cash reserve ratios and liquidity ratios. Qualitative methods include regulating consumer credit, changing loan requirements and moral persuasion. Quantitative methods control overall credit while qualitative targets specific uses. Choosing methods depends on their directness and ability to influence creditors versus debtors. Effectiveness can be limited by an unorganized banking system and lack of cooperation.
Monetary Economics-Quantity Theory of MoneySaradha Shyam
The document discusses the quantity theory of money, which attempts to explain changes in the value of money and price levels based on changes in the money supply. It introduces the demand for money, which depends on factors like income, interest rates, and transaction needs. The quantity theory is explained using Fisher's equation of exchange, which states that the total money supply (money in circulation multiplied by its velocity) equals the total value of goods and services traded (total goods multiplied by the price level). The theory argues that if velocity and output are stable, then changes in the money supply will directly impact price levels. The document notes criticisms of the quantity theory's assumptions and limitations.
Friedman developed a theory of demand for money that asserts it is a function of total wealth, the division of wealth between human and non-human forms, rates of return on various assets, and other influences on tastes and preferences. His demand for money function includes variables like income, asset prices, and interest rates. Empirical studies found the demand for money is stable and more related to permanent income than current income. For underdeveloped countries, demand may be interest-inelastic and influenced more by expected price changes than interest rates due to financial and economic dualism.
The document discusses the characteristics of money. It explains that early societies used bartering with goods like animals and food, but that carrying all these items was inconvenient. Money was then invented as it is durable, portable, divisible, uniform, available in limited supply, and universally accepted. The six key characteristics of money are described in detail. The document notes that the US Federal Reserve plays a role in determining how much money is in circulation.
Gold standard is a monetary system in which the standard unit of currency is a fixed quantity of gold or is kept at the value of a fixed quantity of gold.
Currency convertibility refers to the ability to exchange domestic currency for foreign currency without limit. There are three types: fully convertible where there are no restrictions, partially convertible where some restrictions exist, and non-convertible where no exchanges are allowed. India has full convertibility for current account transactions like trade but partial convertibility for capital account transactions like foreign direct investment. While greater capital account convertibility could bring benefits like risk diversification and foreign investment, it also poses risks like volatility from hot money flows.
This document provides an overview of monetary policy through 7 chapters. It begins with an introduction and outlines the objectives, methodology and limitations of the report. Chapter 2 defines monetary policy and provides a history and overview of its scope, objectives and tools. Chapter 3 discusses the transmission mechanism of monetary policy through interest rates and financial markets. Chapter 4 examines the impacts of monetary policy on capital markets and inflation. Chapter 5 analyzes Bangladesh's monetary policy strategy, instruments and challenges. Chapter 6 concludes with an advocacy perspective on monetary policy in Bangladesh.
Tobin's portfolio balance approach views money as one of many assets individuals hold in their investment portfolios. It recognizes that people face a tradeoff between safe assets like money that earn no interest versus risky bonds that do earn interest. According to Tobin, individuals seek to diversify their portfolio to balance these risks and returns. Tobin's liquidity preference curve shows that as interest rates rise, individuals will hold less money and more bonds, and vice versa as interest rates fall. Overall, Tobin's approach views the demand for money as jointly determined with other assets based on rates of return, inflation, and total wealth.
The document discusses monetary policy in India. It begins by defining monetary policy as the process by which a central bank like the Reserve Bank of India controls money supply to maintain price stability and economic growth. It then outlines the objectives of India's monetary policy and the major monetary policy tools and operations used by RBI like cash reserve ratio, statutory liquidity ratio, and bank rate. It further discusses the role of monetary policy in developing economies like India and some obstacles to effective monetary policy implementation. Finally, it notes some recent changes to RBI's monetary policy approach including using multiple indicators instead of just money supply targets and reducing required reserve ratios to boost lending.
The document discusses the history and functions of money and banks. It explains that barter was replaced by money because it solves the problem of the "double coincidence of wants." The longest used and most widespread form of money was the cowrie shell. The document then outlines the key roles of money as a medium of exchange, unit of account, and store of value. It defines banks as institutions that take deposits and make loans, and describes how they generate profits, set interest rates, are regulated to prevent risk, and can face bankruptcy if too many depositors withdraw funds.
The document discusses the future of the global financial system. It talks about how the global financial system can reinforce sustained economic growth and development while also addressing vulnerabilities revealed by the global financial crisis. Specific topics discussed include foreign direct investment in India, capital markets, and GDP of India. India's GDP growth rate was reported at 7.3% for the third quarter of 2016.
This document is an assignment submitted by Moin Sarker and Melon Fakir to their instructor Priyanka Das Dona at World University of Bangladesh. The assignment analyzes the evolution of money throughout civilization, from early barter systems and commodity currencies to modern forms of fiat currency like coins, paper notes, plastic cards, e-money and mobile money. It discusses the history and types of money, how money functions in an economy, and the flow of money circulation. The assignment provides an overview of how money has developed from early non-monetary exchange methods to the various representative and fiat forms of currency used around the world today.
This document defines key concepts related to gifts, assignments, transfers, and business entities such as sole proprietorships, partnerships, and limited liability partnerships (LLPs). It discusses that a gift requires intent to transfer ownership from the donor to the donee, delivery of the property, and acceptance by the donee. An inter vivos gift is given during one's lifetime, while a gift causa mortis is given in expectation of death. It also defines donors and donees, and notes that assignments transfer rights in property. Partnerships and LLPs are defined as business relationships between individuals seeking to share profits.
Money refers to anything that is generally accepted as payment. It functions as a medium of exchange, unit of account, and store of value. Money includes currency, deposits, and other liquid assets. The money supply has evolved from commodity money to various forms like paper currency, checks, and electronic payments. Measuring the money supply includes aggregates like M1, M2, and M3 that capture currencies and increasingly liquid assets.
This document discusses money supply and the banking system. It defines different measures of money supply (M1, M2, M3, M4) and explains how money is created through the banking system. Banks act as intermediaries that accept deposits and create money through lending. This expands the money supply through the money multiplier process. The money supply is determined by factors like public behavior, commercial bank behavior, and central bank influence. The money market reaches equilibrium where the demand for money equals the supply.
This document summarizes the key aspects of monetary policy in Bangladesh. It discusses how the central bank uses interest rates and money supply to influence inflation. However, monetary policy faces limitations in Bangladesh due to imperfect markets and the economy's reliance on imports. The transmission of interest rate changes is also weak as banks determine rates collusively. While price stability is ideal, monetary policy alone has limited impact on inflation in Bangladesh given global price influences and excess bank liquidity reducing the central bank's policy instruments.
The document discusses several theories of interest, including classical, neoclassical loanable funds, modern, productivity, abstinence, Austrian time preference, Fisher's time preference, and Keynes' liquidity preference theories. The classical theory views interest as determined by real factors like savings and investment. The loanable funds theory sees interest set by demand and supply of loanable capital. Modern theory combines monetary and non-monetary factors using IS and LM curves.
Money originated from the Latin word 'MONETO' and can be defined as any commodity that is generally accepted for exchange and as a measure of value. The primary functions of money are as a medium of exchange to purchase goods and services, and as a measure of value to compare the worth of different commodities. Secondary functions include acting as a standard for deferred payments, a store of value for present and future needs, and allowing the transfer of purchasing power across locations.
Monetary policy involves controlling the supply of money in an economy to achieve goals like price stability and economic growth. The central bank implements monetary policy using tools like open market operations, adjusting reserve ratios, and setting interest rates. These tools work through channels like interest rates and credit to influence money supply, inflation, and other macroeconomic variables. Effective monetary policy requires coordination between fiscal and monetary authorities to avoid conflicting policies. The Bangladesh Bank follows an inflation targeting framework and uses reserve money and broad money as targets to achieve its goals of stable prices, growth, and balance of payments.
This document provides an overview of monetary policy in Bangladesh. It defines monetary policy and discusses its objectives, which include rapid economic growth, price stability, exchange rate stability, full employment, and equal income distribution. It also outlines the tools used by Bangladesh's central bank to implement monetary policy, including reserve requirements, open market operations, and interest rate controls. The document then summarizes Bangladesh's monetary policy in 2018 and analyzes the impact of expansionary monetary policy on GDP.
The document discusses the transmission mechanism of monetary policy through four key points:
1. It introduces the transmission mechanism and defines it as the series of links between monetary policy changes and their impacts on output, employment, and inflation.
2. It outlines the session, which will cover the impact of interest rate changes on other interest rates, consumption, and investment.
3. It provides brief definitions and discussions of consumption and investment, and how monetary policy influences them through several channels like interest rates, asset prices, and exchange rates.
4. It notes that monetary policy is likely to influence aggregate demand in various ways and that the relationship between interest rates and aggregate demand is complex, being influenced by expectations and time
this ppt is about metallic standards i.e. silver and gold standards. I hope it helps. IHDSUYFGUKWEFGYGNHSDSFGHGSDJATYKUQWGRMJWHERGJEHRF,AJHKAWGFMGJGFKUERJWEWGRJERYEJGFJHGFLSKAFHLAIWUILWHRQWYKUWHG,AJSGFJHGFKYRWRUWKJWIWOIUQLJGFHD,KALOUWOEIYRIUETIUEGJEH.WEKJRWOEIRUOWILEUIDHF/SLKEJLKFHEIURUWRYIUWYR;WIUEQOUEOQIUIHDA,H,KJHFJDGFHFGAKSJHFSYUEJHRKJEHRIUYKJDS,KJFOIUEJE.KHJGFJDGJHDSUFYEUYRLEIRUIERJSDHFKJDGJDGUDYEHKERIUYERUERUERHFEHFHEDGEWYTRKWERLEURYIUERYUERYEUYRUERYERYBJSCUYBGEYGFNEHJDNEBHJNCEHYEkuwesghjugf,jSGWEGFYYEWGFHNXJWEYUGHEWYDUCGHJNHYUHJYYYYYYYYGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
The document discusses credit control methods used by central banks to achieve objectives like price stability and economic growth. It describes quantitative methods like adjusting the bank rate, open market operations, cash reserve ratios and liquidity ratios. Qualitative methods include regulating consumer credit, changing loan requirements and moral persuasion. Quantitative methods control overall credit while qualitative targets specific uses. Choosing methods depends on their directness and ability to influence creditors versus debtors. Effectiveness can be limited by an unorganized banking system and lack of cooperation.
Monetary Economics-Quantity Theory of MoneySaradha Shyam
The document discusses the quantity theory of money, which attempts to explain changes in the value of money and price levels based on changes in the money supply. It introduces the demand for money, which depends on factors like income, interest rates, and transaction needs. The quantity theory is explained using Fisher's equation of exchange, which states that the total money supply (money in circulation multiplied by its velocity) equals the total value of goods and services traded (total goods multiplied by the price level). The theory argues that if velocity and output are stable, then changes in the money supply will directly impact price levels. The document notes criticisms of the quantity theory's assumptions and limitations.
Friedman developed a theory of demand for money that asserts it is a function of total wealth, the division of wealth between human and non-human forms, rates of return on various assets, and other influences on tastes and preferences. His demand for money function includes variables like income, asset prices, and interest rates. Empirical studies found the demand for money is stable and more related to permanent income than current income. For underdeveloped countries, demand may be interest-inelastic and influenced more by expected price changes than interest rates due to financial and economic dualism.
The document discusses the characteristics of money. It explains that early societies used bartering with goods like animals and food, but that carrying all these items was inconvenient. Money was then invented as it is durable, portable, divisible, uniform, available in limited supply, and universally accepted. The six key characteristics of money are described in detail. The document notes that the US Federal Reserve plays a role in determining how much money is in circulation.
Gold standard is a monetary system in which the standard unit of currency is a fixed quantity of gold or is kept at the value of a fixed quantity of gold.
Currency convertibility refers to the ability to exchange domestic currency for foreign currency without limit. There are three types: fully convertible where there are no restrictions, partially convertible where some restrictions exist, and non-convertible where no exchanges are allowed. India has full convertibility for current account transactions like trade but partial convertibility for capital account transactions like foreign direct investment. While greater capital account convertibility could bring benefits like risk diversification and foreign investment, it also poses risks like volatility from hot money flows.
This document provides an overview of monetary policy through 7 chapters. It begins with an introduction and outlines the objectives, methodology and limitations of the report. Chapter 2 defines monetary policy and provides a history and overview of its scope, objectives and tools. Chapter 3 discusses the transmission mechanism of monetary policy through interest rates and financial markets. Chapter 4 examines the impacts of monetary policy on capital markets and inflation. Chapter 5 analyzes Bangladesh's monetary policy strategy, instruments and challenges. Chapter 6 concludes with an advocacy perspective on monetary policy in Bangladesh.
Tobin's portfolio balance approach views money as one of many assets individuals hold in their investment portfolios. It recognizes that people face a tradeoff between safe assets like money that earn no interest versus risky bonds that do earn interest. According to Tobin, individuals seek to diversify their portfolio to balance these risks and returns. Tobin's liquidity preference curve shows that as interest rates rise, individuals will hold less money and more bonds, and vice versa as interest rates fall. Overall, Tobin's approach views the demand for money as jointly determined with other assets based on rates of return, inflation, and total wealth.
The document discusses monetary policy in India. It begins by defining monetary policy as the process by which a central bank like the Reserve Bank of India controls money supply to maintain price stability and economic growth. It then outlines the objectives of India's monetary policy and the major monetary policy tools and operations used by RBI like cash reserve ratio, statutory liquidity ratio, and bank rate. It further discusses the role of monetary policy in developing economies like India and some obstacles to effective monetary policy implementation. Finally, it notes some recent changes to RBI's monetary policy approach including using multiple indicators instead of just money supply targets and reducing required reserve ratios to boost lending.
The document discusses the history and functions of money and banks. It explains that barter was replaced by money because it solves the problem of the "double coincidence of wants." The longest used and most widespread form of money was the cowrie shell. The document then outlines the key roles of money as a medium of exchange, unit of account, and store of value. It defines banks as institutions that take deposits and make loans, and describes how they generate profits, set interest rates, are regulated to prevent risk, and can face bankruptcy if too many depositors withdraw funds.
The document discusses the future of the global financial system. It talks about how the global financial system can reinforce sustained economic growth and development while also addressing vulnerabilities revealed by the global financial crisis. Specific topics discussed include foreign direct investment in India, capital markets, and GDP of India. India's GDP growth rate was reported at 7.3% for the third quarter of 2016.
This document is an assignment submitted by Moin Sarker and Melon Fakir to their instructor Priyanka Das Dona at World University of Bangladesh. The assignment analyzes the evolution of money throughout civilization, from early barter systems and commodity currencies to modern forms of fiat currency like coins, paper notes, plastic cards, e-money and mobile money. It discusses the history and types of money, how money functions in an economy, and the flow of money circulation. The assignment provides an overview of how money has developed from early non-monetary exchange methods to the various representative and fiat forms of currency used around the world today.
This document defines key concepts related to gifts, assignments, transfers, and business entities such as sole proprietorships, partnerships, and limited liability partnerships (LLPs). It discusses that a gift requires intent to transfer ownership from the donor to the donee, delivery of the property, and acceptance by the donee. An inter vivos gift is given during one's lifetime, while a gift causa mortis is given in expectation of death. It also defines donors and donees, and notes that assignments transfer rights in property. Partnerships and LLPs are defined as business relationships between individuals seeking to share profits.
A study on Celebrity endorsement of Consumer buying decision ReportMoin Sarker
This document is a report submitted by three students to their lecturer on the topic of the effect of celebrity endorsement on consumer purchase decisions. It includes an abstract, introduction, literature review on celebrity endorsements and risks/benefits, methodology, data analysis, findings, conclusions and references. The literature review discusses what defines a celebrity, reasons for using endorsements, factors in selecting endorsers, and risks like the celebrity overshadowing the brand or questions of credibility. The report analyzes data on the influence of celebrity endorsements on consumer attitudes and purchase intentions.
This document contains the answers to six questions related to business law as part of an MBA assignment.
1) The first question is answered over multiple paragraphs discussing the nature and significance of business law. Key points made include that law prescribes conduct and standards, is imposed on members of society, and is enforced by the executive.
2) The second question defines partnership and lists its essential elements under Indian law.
3) The third question examines the six key rights of consumers enshrined in the Indian Consumer Protection Act of 1986.
4) The fourth question defines bailment under Indian law and lists its essential requisites.
5) The fifth question names the instruments recognized as negot
The document is a paper submitted for a course on financial institutions and markets. It provides an overview of the money market, including definitions, key participants, instruments, and objectives. The money market allows short-term borrowing and lending, typically less than one year, to meet temporary cash needs. It helps channel savings to those needing funds and facilitates monetary policy. Principal participants include banks, corporations, money market mutual funds. Common instruments include certificates of deposit, repurchase agreements, commercial paper, and treasury bills. The goals for investors are safety, liquidity, and generating interest income on temporary cash surpluses.
Bartering was the original form of exchange before money was developed. Livestock, shells, and beads were some of the early forms of commodity money. Money needs to serve as a medium of exchange, store of value, and unit of account. King Croesus created the first coins of gold and silver in 561 BC. Paper currency was first issued in China in 806 AD but led to inflation. Various commodities served as forms of money throughout history. Goldsmith notes marked the early use of banknotes in England in the 1600s. The US established its own currency systems after gaining independence.
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The document defines banking business and banks according to Malaysian law. Under the Banking and Financial Institutions Act of 1989, a bank is defined as an entity that carries out banking business, which includes receiving deposits, paying/collecting checks, and providing financing such as lending money, leasing, and purchasing financial instruments. Banks play roles like promoting savings and reasonable interest rates. They provide services like deposits, loans, remittances, and more. Regulations require banks to maintain reserves to control liquidity and credit levels.
The document provides an overview of fiat money and gold money, comparing and contrasting the two types. It begins with an introduction stating the purpose is to compare fiat and gold money on economic and social bases. It then discusses the definition of money, the emergence of different forms of money throughout history including commodity money backed by intrinsic value like gold as well as fiat money which derives its value by government decree instead of commodity backing. The document also examines the functions of money and development of monetary systems over time, focusing on gold-backed currency, the gold standard, and the emergence of fiat currency not backed by gold reserves.
Economics as if People Really Mattered - Week TwoConor McCabe
1. Money is more helpfully seen as a social construct rather than a commodity, as it requires backing from an authority through political or social means.
2. Historically, money systems have been imposed on subsistence communities and forced them into wage labor as economies became monetized and lands were enclosed.
3. How money is issued and circulated has significant social and political implications that go beyond just reflecting value in the "real economy."
This document discusses the origins and functions of money. It argues that barter did not precede the use of money, as money evolved alongside trade. Commodities like tobacco, furs, beads, and rice served as early forms of money in colonial America because they had assured markets and could easily be exchanged. The document defines money as a means of payment, noting its essential characteristic is being easily passed from person to person. While government involvement can impact certain types of money like coins and paper money, standard coins like gold essentially just represent the metal's value.
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio economic context.
Economics for Activists Week Two Mechanics Institute Limerick May '13Conor McCabe
The document discusses the nature and origins of money. It argues that money is a social construct, not a natural phenomenon, and that its value comes from the trust in the institutions that create and circulate it rather than any intrinsic value. It asserts that money systems have been imposed on subsistence communities and have enabled the extraction of profits. While conventional economics sees money as reflecting real economic activity, this document sees money as having its own political dynamics and impact. It also discusses how the modern banking system allows private creation of money through lending.
PowerPoint: My Money and Its DevelopmentYaryalitsa
Money refers to assets that function as a medium of exchange, unit of account, and store of value, while currency is a physical form of money like coins and banknotes used in a particular country. Early civilizations used barter systems and commodity money like gold coins, but these had problems leading to the development of fiat currency not backed by commodities. Modern forms of money include paper currency, credit money in accounts, and digital currencies as society has moved to more abstract representations of value over physical commodities.
This is a talk I give at New York Culture Salon(纽约文化沙龙) , I introduce Bitcoin to Chinese Community in New York.
In this talk, we will talk about the origin of money, how our current financial system create money, how the Bitcoin protocol works, and what value it can bring us. We are also going to discuss stories behind the creator of Bitcoin Satoshi Nakamoto, and how investors, financial experts and mass media view Bitcoin.
Money has evolved over time from a barter system to increasingly abstract forms. Early currencies included commodities like grains, metals, and animals before standardized coins were developed in China and Lydia. Paper money and checks later emerged, allowing transactions to occur without physical exchange. Today, digital forms of money including credit, debit, and digital currencies perform the core functions of serving as a medium of exchange, store of value, and unit of account. Banks have facilitated transactions through checks, credit, and more recently plastic forms of money like credit cards since the development of formal banking institutions in ancient Rome.
Gresham’s Law states that ‘bad money drives out the good’. This mean.pdfmohammedfootwear
Gresham’s Law states that ‘bad money drives out the good’. This means that when two monies
circulate at the same time, firms and households tend to spend the inferior form of money and
keep or hoard the ‘better’ one. Is this behavior consistent with our definition of money or those
features stressed by Jevons? Explain. Virtually every civilization has used one form of money or
another. We have defined money as a form of wealth-a means of transferring consump- tion
across time-which is generally and readily accepted by others in market transactions. Despite its
very low rate of return-banknotes yield no interest at all-people and companies use it. This is
because money uniquely facilitates commercial transactions, big and small alike. As a result, it
lies at the heart of any economy. The nineteenth-century British economist William Jevons
defined money in his time as hav- ing four attributes or functions: (1) means of pay- ment, (2)
unit of account, (3) store of value, and (4) standard of deferred payment. These features
described well the coins and sterling banknotes as well as the growing use of paper cheques,
promis- sory notes, and other negotiable instruments of his day. Yet do they describe adequately
what we use today and what we will use as money in the future?
Solution
Ans
This is consistent with jevons definition because only that money is hoarded which is better in
quality. In other words whose value is greater as store of value. E. G better gold coins are
hoarded because they store better and greater amount of gold..
In this paper, a brief overview of the history of money will be given and principles of what make money useful in business commerce. Then, categories with electronic money will be described and bring a distinction with electronic payment systems. Next, the impact electronic money has had in general in our globalized economy will be discussed. Then, opportunities that computer science has involved in the field of electronic money will be discussed such as in data security, privacy, and traceability. In addition, drawbacks and risks involved in the use of electronic money will be discussed. Finally, a summary will be made about the future expectations for electronic money in the global market place.
This document discusses fiat currency and provides arguments against its legitimacy from an Islamic perspective. It begins with definitions of key terms like money, currency, and fiat money. It then outlines the historical development of fiat currency and arguments for and against it. The document argues that fiat currency poses threats to Islamic ideals and the maqasid (objectives) of shariah by eroding its foundations over time and causing economic harms. It proposes some intermediate alternative payment systems that could better align with shariah objectives while being practically feasible.
UNIT 4 MEANING AND EVOLUTION OF BANKING
CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Meaning of a Bank, Banking and Banker
3.2 Evolution of Banking
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Readings
1.0 INTRODUCTION
Various attempts have been made to define the term bank or banker.
In this unit, we shall define the term bank or banker. We shall also trace
the origin of banking.
2.0 OBJECTIVES
At the end of the unit, you should be able to:
• Explain the meaning of a Bank, Banking or Banker
• Trace the evolution of Banking in Nigeria.
3.0 MAIN CONTENT
3.1 Meaning of Bank
As a result of different kinds of banks in existence nowadays, it would
be difficult, or at least cumbersome, to formulate a definition of banking
which connotes the diverse activities of all kinds of banks. We shall
therefore consider the definition under three view points:
a) Definitions of bank or banker by Text-Book Writers
b) Definitions of bank or banker by Status
c) Definitions of bank or banker as expressed by the Courts
a) Definitions of bank or banker by Text-Book Writers: A bank
has been defined by Dr. Hart as " a person or company carrying
on the business of receiving moneys, and collecting drafts, for
customers subject to the obligation of honouring cheques drawn
upon them from time to time by the customers Lo the extent of the
amounts available on the current accounts".
MBF833 MONEY AND
BANKING
In his 8th edition, published in 1972 Paget defined "a bank or
banker as a corporation or person (or group of persons)
who accept moneys on current accounts, pay cheques drawn upon
such account on demand and collect cheques for customers, that
if such minimum services are afforded to al and sundry without
restriction of any kind, the business is a banking business,
whether or not other business is undertaken at the same time; that
providing the banking business as so understood is not a mere for
other business, the person or corporation is a banker or bank for
the purposes of statutes relating to banking, other than those
where the sole criterion is the satisfaction of some government
department".
Chamber's Twentieth Century Dictionary defines a bank as an
"institution for the keeping, lending and exchanging, etc of
money. Economists have also defined a bank highlighting
its various functions. According to Crowther, "The banker's business
is to take the debts of other people to offer his own in exchange,
and thereby create money." A similar definition has been given
by Kent who defines a bank as "an organisation whose principal
operations are concerned with the accumulation of the
temporarily idle money of the general public for the purpose of
advan
Bartering was the earliest form of exchange, followed by the use of livestock, shells, and beads as a medium of exchange. The first coins were created in Lydia in 561 BC, and paper currency was first issued in China in 806 AD. Throughout history, various commodities served as money including wampum, gold, and "Continentals" issued during the Revolutionary War. The US established the dollar and a national bank system in the late 18th century.
A brief history of money from barter to bitcoin. This presentation covers the essential characteristics of money and how it has evolved from barter to commodities to cash and finally to digitized currency, also known as "cryptocurrencies"--the most popular of which is bitcoin.
This document discusses the history of payment systems from ancient times of bartering in 6000 BC to modern electronic and mobile payments. It provides details on some key developments like Lydia's King Alyattes minting the first coins in 600 BC, the first paper money issued in China in the 7th century AD, and the first paper currency in America issued in 1690 by the Massachusetts Bay colony government. The document also defines different types of modern payments like checks, e-payments, and m-payments.
The invention of coinage in lydia, in india, and in chinaDokka Srinivasu
This document discusses the independent invention of coinage in three ancient societies: Lydia, India, and China. It notes that while coins originated in Lydia and spread to Greece, coinage also developed independently in India and China using different technologies. Lydian coins were made of electrum and stamped on both sides with intaglio designs, while early Indian coins took irregular bar shapes marked with punched symbols. Though each society invented coinage separately to meet economic needs, western-style coins eventually spread globally through cultural influence and imitation.
Money, their origin functions. Modern money Part1Advaldo CM
This document provides an outline for a paper on the history and functions of money. It begins with an introduction discussing why the history of money is important and how money relates to quality of life. It then covers definitions of money, the origins of money through barter systems, different types of currencies throughout history, how money has evolved, and key functions of money such as being a medium of exchange, store of value, and unit of account. The document concludes with a section on references.
Money has taken many forms throughout history, from physical commodities like livestock and grains used for barter, to precious metals, to modern currencies with no intrinsic value. Early monetary systems developed out of barter systems as standardized units of exchange like coins made transactions more efficient. Theories of how money originated include that it emerged naturally from market activity (commodity theory) or that states played a key role in establishing currencies (credit theory). Overall, money has evolved from directly bartering goods to serving as a mechanism that allows indirect exchange and stores of wealth.
This document discusses grapevine communication and email communication. It defines grapevine communication as informal channels of business communication that spread quickly within an organization. While grapevine cannot be used for formal communication, it allows for the spread of issues and information across authority levels. The document also outlines characteristics, types of grapevine chains, and how organizations can manage grapevine. It then shifts to discussing email communication, including its advantages as a business tool, elements of email messages, appropriate formality, and traits of effective emails. It concludes with inappropriate uses of email communication.
Function, Performance & significant role of Islami Bank Bangladesh LimitedMoin Sarker
This document summarizes the acknowledgements and authors of a project paper on Islami Bank Bangladesh Limited (IBBL). It thanks the course instructor and faculty for their guidance and support throughout the project. It also thanks the authors' parents and friends for their assistance in finalizing the project within the timeframe. The authors are identified as Moin Sarker and Melon Fakir.
effects of Celebrity endorsement on cunsumer buying decision PresentationMoin Sarker
This document summarizes a study on the effects of celebrity endorsement on consumers' purchase decisions. It describes the study's methodology, including a sample size of over 100 people, mostly students. It finds that most respondents think celebrity endorsements help increase sales and profits. Most respondents engage with celebrity endorsements through TV ads. However, most respondents also say celebrity endorsements do not influence their purchase decisions. Most prefer film stars as celebrities.
The document discusses the Q methodology, which is a research method used in psychology and social sciences to study people's subjectivity or viewpoint. It involves having subjects sort statements based on a condition of instruction and analyzing the results using Q factor analysis. Key points:
- Q methodology looks at correlations between subjects across variables, unlike typical factor analysis which looks at correlations between variables across subjects.
- Data comes from Q sorts where subjects rank a set of statements. This captures how people think about ideas in relation to each other rather than in isolation.
- Statements are typically drawn from a "concourse" representing all perspectives on the topic.
- Q methodology typically uses fewer subjects than other social science methods but
Business Plan: Photography Business (slides)Moin Sarker
The document introduces The Artsy Pixel photography business started in mid-2015. It provides an overview of the business including the founders, services offered, location, mission, management, marketing and sales strategies, products, financial plan and investment needs. The business offers photography and videography services including studio and on-location shoots, editing, and equipment rental. It is located in Mirpur, Dhaka and aims to establish itself as a flexible option for small and medium businesses through a range of services and involvement in the creative process.
The document is a business plan for a photography business called The Artsy Pixel located in Dhaka, Bangladesh. The business will offer photography and cinematography services including portraits, events, and weddings. It will have a team of photographers, videographers, and editors. The business aims to be the top photography agency in Bangladesh through quality service and a focus on customer satisfaction. Competition comes from other local photography studios but the business sees opportunities in its talented team and providing a variety of packages and services.
Ratio Analysis of Apex Adelchi Footwear Ltd (Top Page ) Moin Sarker
This document analyzes the financial statements of Apex Adelchi Footwear Limited over several years. It begins with an executive summary describing the company as a leading manufacturer and exporter of leather footwear in Bangladesh with partnerships in Italy. The document then contains an analysis of the company's liquidity, asset management, debt management, profitability, and market value ratios to evaluate its financial performance. It finds that while the company has been performing satisfactorily and expanding its assets, it also needs to maintain growth and take advantage of competitive opportunities to remain successful in the future.
Ratio Analysis of Apex Adelchi Footwear LtdMoin Sarker
The document discusses key financial statements and the information they provide to stakeholders. It explains that the balance sheet provides information on a company's financial condition by showing assets, liabilities, and equity. The income statement reports operating results like revenues, expenses, and profits. The cash flow statement shows cash inflows and outflows from operating, investing, and financing activities. Ratio analysis is also discussed as a tool used to evaluate financial performance and position by comparing different financial metrics over time. The document provides examples of liquidity, asset management, and debt ratios calculated for a company to analyze its financial management.
Apex Adelchi Footwear Limited Ratio Analysis Moin Sarker
The document analyzes various financial ratios of Apex Adelchi Footwear Limited from 2010 to 2014. It shows that the company's liquidity, asset management, and debt management ratios were generally dissatisfying over this period, with current ratio, quick ratio, inventory turnover ratio, days sales outstanding, fixed assets turnover ratio, total assets turnover ratio, debt ratio, and equity multiplier below target levels. However, the profitability ratios of price/earnings ratio and market/book value ratio were satisfactory. The overall financial performance of the company requires improvement in working capital management and debt reduction.
The document provides a business plan for a solar energy company called Power Wow Energy. The summary is:
1) Power Wow Energy aims to provide cost-effective solar energy products and solutions to address Bangladesh's energy shortage through harnessing renewable solar energy.
2) The business plan details the company's mission, products including various home solar kits, management structure, suppliers, sales and profit projections, and marketing strategy to establish the business within one year.
3) The plan provides financial projections showing an expected profit of 17.87 lakh taka in the first year from sales of 50 solar home systems, with expenses of 12.96 lakh taka resulting in a net profit of 4.91
Social stratification involves the classification of people into hierarchical groups based on socioeconomic factors like wealth, income, occupation, education, and social status. It persists over generations and involves inequities in power, prestige, and property ownership between groups. While social stratification systems vary across cultures, they typically involve ranking social categories that influence life experiences and opportunities.
Cisco is a technology company founded in 1984 that produces networking hardware, software, and consulting services. Originally focused on hardware, Cisco evolved to offer more services like consulting and support as internet usage increased. Cisco promotes collaboration between employees, customers, and partners by providing technologies and strategies that improve communication and decision making. This collaborative approach helped Cisco grow from $1.2 billion in annual revenue in 1995 to $43 billion in 2012.
This case study involves a group project for Falcon Computer. The group members working on the project include Moin Sarker, Ayesha Sultana, MD. Sohel, Saiera Kabir, and Sadman Saif.
The document summarizes an audit report presentation given to shareholders of National Credit and Commerce Bank. It includes slides on the basic elements of an audit report according to standards, which are the title, addressee, introductory paragraph, scope paragraph, opinion paragraph, date, auditor's address, and signature. It provides an unqualified opinion on the bank's annual report for 2012. It also discusses the auditor's responsibilities to evaluate financial statements and management's responsibilities for the statements.
Managerial accounting helps managers with vital activities like planning, controlling, and decision making. It provides information to assist with planning, controlling business activities, and making decisions. Managerial accounting differs from financial accounting in that it focuses on providing information internally to managers rather than externally to stakeholders.
How to Make a Field Mandatory in Odoo 17Celine George
In Odoo, making a field required can be done through both Python code and XML views. When you set the required attribute to True in Python code, it makes the field required across all views where it's used. Conversely, when you set the required attribute in XML views, it makes the field required only in the context of that particular view.
Walmart Business+ and Spark Good for Nonprofits.pdfTechSoup
"Learn about all the ways Walmart supports nonprofit organizations.
You will hear from Liz Willett, the Head of Nonprofits, and hear about what Walmart is doing to help nonprofits, including Walmart Business and Spark Good. Walmart Business+ is a new offer for nonprofits that offers discounts and also streamlines nonprofits order and expense tracking, saving time and money.
The webinar may also give some examples on how nonprofits can best leverage Walmart Business+.
The event will cover the following::
Walmart Business + (https://business.walmart.com/plus) is a new shopping experience for nonprofits, schools, and local business customers that connects an exclusive online shopping experience to stores. Benefits include free delivery and shipping, a 'Spend Analytics” feature, special discounts, deals and tax-exempt shopping.
Special TechSoup offer for a free 180 days membership, and up to $150 in discounts on eligible orders.
Spark Good (walmart.com/sparkgood) is a charitable platform that enables nonprofits to receive donations directly from customers and associates.
Answers about how you can do more with Walmart!"
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...PECB
Denis is a dynamic and results-driven Chief Information Officer (CIO) with a distinguished career spanning information systems analysis and technical project management. With a proven track record of spearheading the design and delivery of cutting-edge Information Management solutions, he has consistently elevated business operations, streamlined reporting functions, and maximized process efficiency.
Certified as an ISO/IEC 27001: Information Security Management Systems (ISMS) Lead Implementer, Data Protection Officer, and Cyber Risks Analyst, Denis brings a heightened focus on data security, privacy, and cyber resilience to every endeavor.
His expertise extends across a diverse spectrum of reporting, database, and web development applications, underpinned by an exceptional grasp of data storage and virtualization technologies. His proficiency in application testing, database administration, and data cleansing ensures seamless execution of complex projects.
What sets Denis apart is his comprehensive understanding of Business and Systems Analysis technologies, honed through involvement in all phases of the Software Development Lifecycle (SDLC). From meticulous requirements gathering to precise analysis, innovative design, rigorous development, thorough testing, and successful implementation, he has consistently delivered exceptional results.
Throughout his career, he has taken on multifaceted roles, from leading technical project management teams to owning solutions that drive operational excellence. His conscientious and proactive approach is unwavering, whether he is working independently or collaboratively within a team. His ability to connect with colleagues on a personal level underscores his commitment to fostering a harmonious and productive workplace environment.
Date: May 29, 2024
Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
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Find out more about ISO training and certification services
Training: ISO/IEC 27001 Information Security Management System - EN | PECB
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General Data Protection Regulation (GDPR) - Training Courses - EN | PECB
Webinars: https://pecb.com/webinars
Article: https://pecb.com/article
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For more information about PECB:
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Strategies for Effective Upskilling is a presentation by Chinwendu Peace in a Your Skill Boost Masterclass organisation by the Excellence Foundation for South Sudan on 08th and 09th June 2024 from 1 PM to 3 PM on each day.
Chapter wise All Notes of First year Basic Civil Engineering.pptxDenish Jangid
Chapter wise All Notes of First year Basic Civil Engineering
Syllabus
Chapter-1
Introduction to objective, scope and outcome the subject
Chapter 2
Introduction: Scope and Specialization of Civil Engineering, Role of civil Engineer in Society, Impact of infrastructural development on economy of country.
Chapter 3
Surveying: Object Principles & Types of Surveying; Site Plans, Plans & Maps; Scales & Unit of different Measurements.
Linear Measurements: Instruments used. Linear Measurement by Tape, Ranging out Survey Lines and overcoming Obstructions; Measurements on sloping ground; Tape corrections, conventional symbols. Angular Measurements: Instruments used; Introduction to Compass Surveying, Bearings and Longitude & Latitude of a Line, Introduction to total station.
Levelling: Instrument used Object of levelling, Methods of levelling in brief, and Contour maps.
Chapter 4
Buildings: Selection of site for Buildings, Layout of Building Plan, Types of buildings, Plinth area, carpet area, floor space index, Introduction to building byelaws, concept of sun light & ventilation. Components of Buildings & their functions, Basic concept of R.C.C., Introduction to types of foundation
Chapter 5
Transportation: Introduction to Transportation Engineering; Traffic and Road Safety: Types and Characteristics of Various Modes of Transportation; Various Road Traffic Signs, Causes of Accidents and Road Safety Measures.
Chapter 6
Environmental Engineering: Environmental Pollution, Environmental Acts and Regulations, Functional Concepts of Ecology, Basics of Species, Biodiversity, Ecosystem, Hydrological Cycle; Chemical Cycles: Carbon, Nitrogen & Phosphorus; Energy Flow in Ecosystems.
Water Pollution: Water Quality standards, Introduction to Treatment & Disposal of Waste Water. Reuse and Saving of Water, Rain Water Harvesting. Solid Waste Management: Classification of Solid Waste, Collection, Transportation and Disposal of Solid. Recycling of Solid Waste: Energy Recovery, Sanitary Landfill, On-Site Sanitation. Air & Noise Pollution: Primary and Secondary air pollutants, Harmful effects of Air Pollution, Control of Air Pollution. . Noise Pollution Harmful Effects of noise pollution, control of noise pollution, Global warming & Climate Change, Ozone depletion, Greenhouse effect
Text Books:
1. Palancharmy, Basic Civil Engineering, McGraw Hill publishers.
2. Satheesh Gopi, Basic Civil Engineering, Pearson Publishers.
3. Ketki Rangwala Dalal, Essentials of Civil Engineering, Charotar Publishing House.
4. BCP, Surveying volume 1
Temple of Asclepius in Thrace. Excavation resultsKrassimira Luka
The temple and the sanctuary around were dedicated to Asklepios Zmidrenus. This name has been known since 1875 when an inscription dedicated to him was discovered in Rome. The inscription is dated in 227 AD and was left by soldiers originating from the city of Philippopolis (modern Plovdiv).
1. T h e E v a l u a t i o n o f m o n e y Page 1
Introduction
Money is an invention of the human mind. The creation of money is made possible because
human beings have the capacity to accord value to symbols. Money is a symbol that represents
the value of goods and services. The acceptance of any object as money – be it wampum, a gold
coin, a paper currency note or a digital bank account balance – involves the consent of both the
individual user and the community. Thus, all money has a psychological and a social as well as
an economic dimension. As human consciousness has evolved, the nature and function of money
has evolved too. While a history of money may trace the origin and usage of different forms of
money at different times and in different parts of the world, an evolutionary perspective on
money traces the social and psychological changes in human attitude and collective behavior that
made possible this historical development.
Money is any item or verifiable record that is generally accepted as payment for goods and
services and repayment of debts in a particular country or socio-economic context, or is easily
converted to such a form. The main functions of money are distinguished as: a medium of
exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment.
Any item or verifiable record that fulfills these functions can be considered money.
(By John N. Smithin. Retrieved July-17-09.)
Money is historically an emergent market phenomenon establishing a commodity money, but
nearly all contemporary money systems are based on fiat money. Fiat money, like any check or
note of debt, is without use value as a physical commodity. It derives its value by being declared
by a government to be legal tender; that is, it must be accepted as a form of payment within the
boundaries of the country, for "all debts, public and private". Such laws in practice cause fiat
money to acquire the value of any of the goods and services that it may be traded for within the
nation that issues it. (Mankiw, N. Gregory (2007). "2". Macroeconomics (6th ed.). New York: Worth
Publishers. pp. 22–32. ISBN 0-7167-6213-7) The money supply of a country consists
of currency (banknotes and coins) and, depending on the particular definition used, one or more
types of bank money (the balances held in checking accounts, savings accounts, and other types
of bank accounts). Bank money, which consists only of records (mostly computerized in modern
banking), forms by far the largest part of broad money in developed countries.
Etymology
The word "money" is believed to originate from a temple of Juno, on Capitoline, one of Rome's
seven hills. In the ancient world Juno was often associated with money. The temple of Juno
Moneta at Rome was the place where the mint of Ancient Rome was located.[10] The name
"Juno" may derive from the Etruscan goddess Uni (which means "the one", "unique", "unit",
"union", "united") and "Moneta" either from the Latin word "monere" (remind, warn, or instruct)
or the Greek word "moneres" (alone, unique).In the Western world, a prevalent term for coin-
money has been specie, stemming from Latin in specie, meaning 'in kind'.
( "Online Etymology Dictionary")
2. T h e E v a l u a t i o n o f m o n e y Page 2
History of money
The use of barter-like methods may date back to at least 100,000 years ago, though there is no
evidence of a society or economy that relied primarily on barter. Instead, non-monetary societies
operated largely along the principles of gift economy and debt. When barter did in fact occur, it
was usually between either complete strangers or potential enemies.
Many cultures around the world eventually developed the use of commodity money. The
Mesopotamian shekel was a unit of weight, and relied on the mass of something like
160 grains of barley. The first usage of the term came from Mesopotamia circa 3000 BC.
Societies in the Americas, Asia, Africa and Australia used shell money – often, the shells of
the cowry (Cypraea moneta L. or C. annulus L.). According to Herodotus, the Lydians were the
first people to introduce the use of gold and silver coins. It is thought by modern scholars that
these first stamped coins were minted around 650–600 BC.
Song Dynasty Jiaozi,the world's earliest paper money | A 640 BC one-third staterelectrum coin from Lydia
The system of commodity money eventually evolved into a system of representative money.
This occurred because gold and silver merchants or banks would issue receipts to their
depositors – redeemable for the commodity money deposited. Eventually, these receipts became
generally accepted as a means of payment and were used as money. Paper money
or banknotes were first used in China during the Song Dynasty. These banknotes, known as
"jiaozi", evolved from promissory notes that had been used since the 7th century. However, they
did not displace commodity money, and were used alongside coins. In the 13th century, paper
money became known in Europe through the accounts of travelers, such as Marco
Polo and William of Rubruck. Marco Polo's account of paper money during the Yuan Dynasty is
the subject of a chapter of his book, The Travels of Marco Polo, titled "How the Great Kaan
3. T h e E v a l u a t i o n o f m o n e y Page 3
Causeth the Bark of Trees, Made Into Something Like Paper, to Pass for Money All Over his
Country." Banknotes were first issued in Europe by Stockholms Banco in 1661, and were again
also used alongside coins. The gold standard, a monetary system where the medium of exchange
are paper notes that are convertible into pre-set, fixed quantities of gold, replaced the use of gold
coins as currency in the 17th-19th centuries in Europe. These gold standard notes were
made legal tender, and redemption into gold coins was discouraged. By the beginning of the 20th
century almost all countries had adopted the gold standard, backing their legal tender notes with
fixed amounts of gold.
After World War II and the Bretton Woods Conference, most countries adopted fiat currencies
that were fixed to the US dollar. The US dollar was in turn fixed to gold. In 1971 the US
government suspended the convertibility of the US dollar to gold. After this many countries de-
pegged their currencies from the US dollar, and most of the world's currencies became unbacked
by anything except the governments' fiat of legal tender and the ability to convert the money into
goods via payment. According to proponents of modern money theory, fiat money is also backed
by taxes. By imposing taxes, states create demand for the currency they issue.
(Wray, L. Randall (2012). Modern money theory: a primer on macroeconomics for sovereign monetary systems.
Houndmills, Basingstoke, Hampshire: Palgrave Macmillan. pp. 45–50.)
Non-monetary exchange
Barter
In Politics Book 1:9 (c.350 B.C.) the Greek philosopher Aristotle contemplated on the nature of
money. He considered that every object has two uses, the first being the original purpose for
which the object was designed and the second possibility is to conceive of the object as an item
to sell or barter. The assignment of monetary value to an otherwise insignificant object such as a
coin or promissory note arises as people and their trading associate evolve a psychological
capacity to place trust in each other and in external authority within barter exchange.
With barter, an individual possessing any surplus of value, such as a measure of grain or a
quantity of livestock could directly exchange that for something perceived to have similar or
greater value or utility, such as a clay pot or a tool. The capacity to carry out barter transactions
is limited in that it depends on a coincidence of wants. The seller of food grain has to find the
buyer who wants to buy grain and who also could offer in return something the seller wants to
buy. There is no agreed standard measure into which both seller and buyer could exchange
commodities according to their relative value of all the various goods and services offered by
other potential barter partners.
4. T h e E v a l u a t i o n o f m o n e y Page 4
Criticisms
David Kinley considers the theory of Aristotle to be flawed because the philosopher probably
lacked sufficient understanding of the ways and practices of primitive communities, and so may
have formed his opinion from personal experience and conjecture.
In his book Debt: The First 5000 Years, anthropologist David Graeber argues against the
suggestion that money was invented to replace barter. The problem with this version of history,
he suggests, is the lack of any supporting evidence. His research indicates that "gift economies"
were common, at least at the beginnings of the first agrarian societies, when humans used
elaborate credit systems. Graeber proposes that money as a unit of account was invented the
moment when the unquantifiable obligation "I owe you one" transformed into the quantifiable
notion of "I owe you one unit of something". In this view, money emerged first as credit and
only later acquired the functions of a medium of exchange and a store of value.
Gift economy
In a gift economy, valuable goods and services are regularly given without any explicit
agreement for immediate or future rewards (i.e. there is no formal quid pro quo). Ideally,
simultaneous or recurring giving serves to circulate and redistribute valuables within the
community.
There are various social theories concerning gift economies. Some consider the gifts to be a form
of reciprocal altruism. Another interpretation is that implicit "I owe you" debt and social status
are awarded in return for the "gifts". Consider for example, the sharing of food in some hunter-
gatherer societies, where food-sharing is a safeguard against the failure of any individual's daily
foraging. This custom may reflect altruism, it may be a form of informal insurance, or may bring
with it social status or other benefits.
Emergence of money
Anatolian obsidian as a raw material for stone-age tools was distributed as early as 12,000 B.C.,
with organized trade occurring in the 9th millennium.(Cauvin;Chataigner 1998) In Sardinia, one
of the four main sites for sourcing the material deposits of obsidian within the Mediterranean,
trade in this was replaced in the 3rd millennium by trade in copper and silver.
As early as 9000 BC both grain and cattle were used as money or as barter (Davies) (the first
grain remains found, considered to be evidence of pre-agricultural practice date to 17,000 BC).
In the earliest instances of trade with money, the things with the greatest utility and reliability in
terms of re-use and re-trading of these things (their marketability), determined the nature of the
object or thing chosen to exchange. So as in agricultural societies, things needed for efficient and
comfortable employment of energies for the production of cereals and the like were the most
easy to transfer to monetary significance for direct exchange. As more of the basic conditions of
5. T h e E v a l u a t i o n o f m o n e y Page 5
the human existence were met to the satisfaction of human needs, so the division of labour
increased to create new activities for the use of time to solve more advanced concerns. As
people's needs became more refined, indirect exchange became more likely as the physical
separation of skilled labourers (suppliers) from their prospective clients (demand) required the
use of a medium common to all communities, to facilitate a wider market.
Aristotle's opinion of the creation of money as a new thing in society is:
When the inhabitants of one country became more dependent on those of another, and they
imported what they needed, and exported what they had too much of, money necessarily came
into use.
The worship of Moneta is recorded by Livy with the temple built in the time of Rome 413 (123);
a temple consecrated to the same god was built in the earlier part of the fourth century (perhaps
the same temple). The temple contained the mint of Rome for a period of four centuries.
The Code of Hammurabi, the best preserved ancient law code, was created ca. 1760 BC (middle
chronology) in ancient Babylon. It was enacted by the sixth Babylonian king, Hammurabi.
Earlier collections of laws include the code of Ur-Nammu, king of Ur (ca. 2050 BC), the Code of
Eshnunna (ca. 1930 BC) and the code of Lipit-Ishtar of Isin (ca. 1870 BC). These law codes
formalized the role of money in civil society. They set amounts of interest on debt... fines for
'wrongdoing'... and compensation in money for various infractions of formalized law.
The Mesopotamian civilization developed a large scale economy based on commodity money.
The Babylonians and their neighboring city states later developed the earliest system of
economics as we think of it today, in terms of rules on debt, legal contracts and law codes
relating to business practices and private property. Money was not only an emergence, it was a
necessity.
Types of Money
Currently, most modern monetary systems are based on fiat money. However, for most of
history, almost all money was commodity money, such as gold and silver coins. As economies
developed, commodity money was eventually replaced by representative money, such as the gold
standard, as traders found the physical transportation of gold and silver burdensome. Fiat
currencies gradually took over in the last hundred years, especially since the breakup of
the Bretton Woods system in the early 1970s.
6. T h e E v a l u a t i o n o f m o n e y Page 6
Commodity
A 1914 British gold sovereign
Many items have been used as commodity money such as naturally scarce precious
metals, conch shells, barley, beads etc., as well as many other things that are thought of as
having value. Commodity money value comes from the commodity out of which it is made. The
commodity itself constitutes the money, and the money is the commodity. Examples of
commodities that have been used as mediums of exchange include gold, silver, copper, rice, salt,
peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, cannabis, candy, etc. These
items were sometimes used in a metric of perceived value in conjunction to one another, in
various commodity valuation or price system economies. Use of commodity money is similar to
barter, but a commodity money provides a simple and automatic unit of account for the
commodity which is being used as money. Although some gold coins such as the Kruger and are
considered legal tender, there is no record of their face value on either side of the coin. The
rationale for this is that emphasis is laid on their direct link to the prevailing value of their fine
gold content. American Eagles are imprinted with their gold content and legal tender face value.
Fiat
Gold coins are an example of legal tender that is traded for their intrinsic value, rather than their face value.
Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it
can be converted into a valuable commodity (such as gold). Instead, it has value only by government order
(fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such
7. T h e E v a l u a t i o n o f m o n e y Page 7
as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful not to accept the fiat currency
as a means of repayment for all debts, public and private.
Some bullion coins such as the Australian Gold Nugget and American Eagle are legal tender, however, they
trade based on the market price of the metal content as a commodity, rather than their legal tender face
value (which is usually only a small fraction of their bullion value).
Fiat money, if physically represented in the form of currency (paper or coins) can be accidentally damaged or
destroyed. However, fiat money has an advantage over representative or commodity money, in that the same
laws that created the money can also define rules for its replacement in case of damage or destruction. For
example, the U.S. government will replace mutilated Federal Reserve notes (U.S. fiat money) if at least half of
the physical note can be reconstructed, or if it can be otherwise proven to have been destroyed. By contrast,
commodity money which has been lost or destroyed cannot be recovered.
Coinage
These factors led to the shift of the store of value being the metal itself: at first silver, then both
silver and gold, and at one point there was bronze as well. Now we have copper coins and other
non-precious metals as coins. Metals were mined, weighed, and stamped into coins. This was to
assure the individual taking the coin that he was getting a certain known weight of precious
metal. Coins could be counterfeited, but they also created a new unit of account, which helped
lead to banking. Archimedes' principle provided the next link: coins could now be easily tested
for their fine weight of metal, and thus the value of a coin could be determined, even if it had
been shaved, debased or otherwise tampered with (see Numismatics).
In most major economies using coinage, copper, silver and gold formed three tiers of coins. Gold
coins were used for large purchases, payment of the military and backing of state activities.
Silver coins were used for midsized transactions, and as a unit of account for taxes, dues,
contracts and fealty, while copper coins represented the coinage of common transaction. This
system had been used in ancient India since the time of the Mahajanapadas. In Europe, this
system worked through the medieval period because there was virtually no new gold, silver or
copper introduced through mining or conquest. Thus the overall ratios of the three coinages
remained roughly equivalent.
A Bangladeshi Coin of 2 Taka (money)
8. T h e E v a l u a t i o n o f m o n e y Page 8
Paper
Huizi currency, issued in 1160
In premodern China, the need for credit and for circulating a medium that was less of a burden
than exchanging thousands of copper coins led to the introduction of paper money, commonly
known today as banknotes. This economic phenomenon was a slow and gradual process that
took place from the late Tang Dynasty (618–907) into the Song Dynasty (960–1279). It began as
a means for merchants to exchange heavy coinage for receipts of deposit issued as promissory
notes from shops of wholesalers, notes that were valid for temporary use in a small regional
territory. In the 10th century, the Song Dynasty government began circulating these notes
amongst the traders in their monopolized salt industry. The Song government granted several
shops the sole right to issue banknotes, and in the early 12th century the government finally took
over these shops to produce state-issued currency. Yet the banknotes issued were still regionally
valid and temporary; it was not until the mid 13th century that a standard and uniform
government issue of paper money was made into an acceptable nationwide currency. The already
widespread methods of woodblock and then Pi Sheng's movable type printing by the 11th
century was the impetus for the massive production of paper money in premodern China.
At around the same time in the medieval Islamic world, a vigorous monetary economy was
created during the 7th–12th centuries on the basis of the expanding levels of circulation of a
stable high-value currency (the dinar). Innovations introduced by Muslim economists, traders
and merchants include the earliest uses of credit, cheques, promissory notes, savings
accounts, transactional accounts, loaning, trusts, exchange, the transfer of credit
and debt,[38] and banking institutions for loans and deposits.
In Europe, paper money was first introduced in Sweden in 1661. Sweden was rich in copper;
thus, because of copper's low value, extraordinarily big coins (often weighing several kilograms)
had to be made. The advantages of paper currency were numerous: it reduced transport of gold
9. T h e E v a l u a t i o n o f m o n e y Page 9
and silver, and thus lowered the risks; it made loaning gold or silver at interest easier, since the
specie (gold or silver) never left the possession of the lender until someone else redeemed the
note; and it allowed for a division of currency into credit and specie backed forms. It enabled the
sale of stock in joint stock companies, and the redemption of those shares in paper.
However, these advantages held within them disadvantages. First, since a note has no intrinsic
value, there was nothing to stop issuing authorities from printing more of it than they had specie
to back it with. Second, because it increased the money supply, it increased inflationary
pressures, a fact observed by David Hume in the 18th century. The result is that paper money
would often lead to an inflationary bubble, which could collapse if people began demanding hard
money, causing the demand for paper notes to fall to zero. The printing of paper money was also
associated with wars, and financing of wars, and therefore regarded as part of maintaining
a standing army. For these reasons, paper currency was held in suspicion and hostility in Europe
and America. It was also addictive, since the speculative profits of trade and capital creation
were quite large. Major nations established mints to print money and mint coins, and branches of
their treasury to collect taxes and hold gold and silver stock.
At this time both silver and gold were considered legal tender, and accepted by governments for
taxes. However, the instability in the ratio between the two grew over the course of the 19th
century, with the increase both in supply of these metals, particularly silver, and of trade. This is
called bimetallism and the attempt to create a bimetallic standard where both gold and silver
backed currency remained in circulation occupied the efforts of inflationist’s. Governments at
this point could use currency as an instrument of policy, printing paper currency such as the
United States Greenback, to pay for military expenditures. They could also set the terms at which
they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount
that could be redeemed.
By 1900, most of the industrializing nations were on some form of gold standard, with paper
notes and silver coins constituting the circulating medium. Private Banks and governments
across the world followed Gresham's Law: keeping gold and silver paid, but paying out in notes.
This did not happen all around the world at the same time, but occurred sporadically, generally in
times of war or financial crisis, beginning in the early part of the 20th century and continuing
across the world until the late 20th century, when the regime of floating fiat currencies came into
force. One of the last countries to break away from the gold standard was the United States in
1971.
No country anywhere in the world today has an enforceable gold standard or silver
standard currency system.
(Banaji,Jairus(2007). "Islam,the Mediterraneanandthe Rise ofCapitalism".Historical Materialism (Brill Publishers)
10. T h e E v a l u a t i o n o f m o n e y Page 10
Bank notes of Bangladeshi Taka
Plastic cards Money
More and more of us are using plastic cards that aim to make our lives easier in various ways.
For example, we may have a card to get money out of a cash point machine or to pay for things
in shops and over the Internet. Some of us may receive our benefits straight onto a card. We also
use plastic cards to borrow books from the library, collect loyalty points in shops, make
telephone calls, and top up gas and electricity meters. In this section we look at the different sorts
of plastic cards that we use to help us manage our money.
Debit or Credit Card
E-money
Electronic money, or e-money, is the money balance recorded electronically on a stored-value
card. These cards have microprocessors embedded which can be loaded with a monetary value.
Another form of electronic money is network money, software that allows the transfer of value
on computer networks, particularly the internet. Electronic money is a floating claim on a
private bank or other financial institution that is not linked to any particular account. Examples
of electronic money are bank deposits, electronic funds transfer, direct deposit, payment
processors, and digital currencies.
Electronic money can either be centralized, where there is a central point of control over the
money supply, or decentralized, where the control over the money supply can come from various
sources. Electronic money that is decentralized is also known as digital currencies. The major
difference between E-money and digital currencies is that E-money doesn't change the value of
the fiat currency (USD, EUR) it represents, but digital currency isn't equivalent to any fiat
11. T h e E v a l u a t i o n o f m o n e y Page 11
currency. In other words, all digital currency is Electronic money, but Electronic money isn't
necessarily digital currency. Many mobile sub-systems have been introduced in the past few
years including Google Wallet and Apple Pay.
In 1983, a research paper by David Chaum introduced the idea of digital cash. In 1990, he
founded DigiCash, an electronic cash company, in Amsterdam to commercialize the ideas in his
research. It filed for bankruptcy in 1998. In 1999, Chaum left the company.
In 1997, Coca Cola offered buying from vending machines using mobile payments. After
that Paypal emerged in 1998. Other system such as e-gold followed suit, but faced issues because
it was used by criminals and was raided by US Feds in 2005. In 2008, bit coin was introduced,
which marked the start of Digital currencies.
Mobile Money:
Mobile Money is a prepaid account facility where Customer can do transactions from anywhere
through mobile phone with 24 hours banking facility. Customer will be able to fund Transfer,
Deposit and Withdraw money from the accredited Pay-points by using Mobile. Customers also
will be able to send remittance faster to the remote place of Bangladesh by availing this product.
Representative money
Warehouse receipts
Warehouse receipts became a very successful form of representative money in ancient Egypt
during the reign of the Ptolemies around 330 BC. Farmers deposited their surplus food grains for
safe-keeping in royal or private warehouses and received in exchange written receipts for
specific quantities of grain. The receipts were backed and redeemable for a usable commodity.
Being much easier to carry, store and exchange than bags of grain, they were accepted in trade as
a secure and more convenient form of payment, acting as a symbolic substitute for the quantities
of food grain they represented. The warehouse receipt itself had no inherent value. It was only a
symbol for something of value.
12. T h e E v a l u a t i o n o f m o n e y Page 12
The invention of representative money had profound effect on the evolution of both money and
society. It directly led to the creation of a new social organization, banking. The network of royal
and private banks that were created during the reign of the Ptolemies constituted a national grain
or girobanking system. Grains were deposited in ‘banks’ for safekeeping. Warehouse receipts
were accepted as form of symbol money because they were fully ‘backed’ by the grains in the
warehouse.
Tallies
The acceptance of symbolic forms of money opened up vast new realms for human creativity. A
symbol could be used to represent something of value that was available in physical storage
somewhere else in ’’space’’, such as grain in the warehouse. It could also be used to represent
something of value that would be available later in ‘’time’’, such as a promissory note or bill of
exchange, a document ordering someone to pay a certain sum of money to another on a specific
date or when certain conditions have been fulfilled. In the 12th Century, the English monarchy
introduced an early version of the bill of exchange in the form of a notched piece of wood known
as a tally stick. Tallies originally came into use at a time when paper was rare and costly, but
their use persisted until the early 19th Century, even after paper forms of money had become
prevalent. The notches were used to denote various amounts of taxes payable to the crown.
Initially tallies were simply used as a form of receipt to the tax payer at the time of rendering his
dues. As the revenue department became more efficient, they began issuing tallies to denote a
promise of the tax assessee to make future tax payments at specified times during the year. Each
tally consisted of a matching pair – one stick was given to the assesses at the time of assessment
representing the amount of taxes to be paid later and the other held by the Treasury representing
the amount of taxes to be collected at a future date. The Treasury discovered that these tallies
could also be used to create money. When the crown had exhausted its current resources, it could
use the tally receipts representing future tax payments due to the crown as a form of payment to
its own creditors, who in turn could either collect the tax revenue directly from those assessed or
use the same tally to pay their own taxes to the government. The tallies could also be sold to
other parties in exchange for gold or silver coin at a discount reflecting the length of time
remaining until the taxes were due for payment. Thus, the tallies became an accepted medium of
exchange for some types of transactions and an accepted medium for store of value. Like the
girobanks before it, the Treasury soon realized that it could also issue tallies that were not
‘backed’ by any specific assessment of taxes. By doing so, the Treasury created new money that
was backed by public trust and confidence in the monarchy rather than by specific revenue
receipts.
Trade Bills of Exchange
Bills of exchange became prevalent with the expansion of European trade toward the end of the
middle Ages. A flourishing Italian wholesale trade in cloth, woolen clothing, and wine, tin and
other commodities was heavily dependent on credit for its rapid expansion. Goods were supplied
to a buyer against a bill of exchange, which constituted the buyer’s promise to make payment at
some specified future date. Provided that the buyer was reputable or the bill was endorsed by a
credible guarantor, the seller could then present the bill to a merchant banker and redeem it in
money at a discounted value before it actually became due. These bills could also be used as a
13. T h e E v a l u a t i o n o f m o n e y Page 13
form of payment by the seller to make additional purchases from his own suppliers. Thus, the
bills – an early form of credit – became both a medium of exchange and a medium for storage of
value. Like the loans made by the Egyptian grain banks, this trade credit became a significant
source for the creation of new money. In England, bills of exchange became an important form
of credit and money during last quarter of the 18th century and the first quarter of the 19th
century before banknotes, checks and cash credit lines were widely available.
Goldsmith bankers
The highly successful ancient grain bank also served as a model for the emergence of the
goldsmith bankers in 17th Century England. These were the early days of the mercantile
revolution before the rise of the British Empire when merchant ships began plying the coastal
seas laden with silks and spices from the orient and shrewd traders amassed huge hoards of gold
in the bargain. Since no banks existed in England at the time, these entrepreneurs entrusted their
wealth with the leading goldsmith of London, who already possessed stores of gold and private
vaults within which to store it safely, and paid a fee for that service. In exchange for each deposit
of precious metal, the goldsmiths issued paper receipts certifying the quantity and purity of the
metal they held on deposit. Like the grain receipts, tallies and bills of exchange, the goldsmith
receipts soon began to circulate as a safe and convenient form of money backed by gold and
silver in the goldsmiths’ vaults. Knowing that goldsmiths were laden with gold, it was only
natural that other traders in need of capital might approach them for loans, which the goldsmiths
made to trustworthy parties out of their gold hoards in exchange for interest. Like the grain
bankers, goldsmith began issuing loans by creating additional paper gold receipts that were
generally accepted in trade and were indistinguishable from the receipts issued to parties that
deposited gold. Both represented a promise to redeem the receipt in exchange for a certain
amount of metal. Since no one other than the goldsmith knew how much gold he held in store
and how much was the value of his receipts held by the public, he was able to issue receipts for
greater value than the gold he held. Gold deposits were relatively stable, often remaining with
the goldsmith for years on end, so there was little risk of default so long as public trust in the
goldsmith’s integrity and financial soundness was maintained. Thus, the goldsmiths of London
became the forerunners of British banking and prominent creators of new money. They created
money based on public trust.
Demand deposits
The primary business of the grain and goldsmith bankers was safe storage of savings. The
primary business of the early merchant banks was promotion of trade. The new class of
commercial banks made accepting deposits and issuing loans their principal activity. They lend
the money they received on deposit. They created additional money in the form of new bank
notes. They also created additional money in the form of demand deposits simply by making
numerical entries in the ledgers of their account holders. The money they created was partially
backed by gold, silver or other assets and partially backed only by public trust in the institutions
that created it.
14. T h e E v a l u a t i o n o f m o n e y Page 14
Counterfeit money
Counterfeit money is imitation currency produced without the legal sanction of the state or
government. Producing or using counterfeit money is a form of fraud or forgery. Counterfeiting
is almost as old as money itself. Plated copies (known as Fourrées) have been found of Lydian
coins which are thought to be among the first western coins. Before the introduction of paper
money, the most prevalent method of counterfeiting involved mixing base metals with pure gold
or silver. A form of counterfeiting is the production of documents by legitimate printers in
response to fraudulent instructions. During World War II, the Nazis forged British pounds and
American dollars. Today some of the finest counterfeit banknotes are called Super dollars
because of their high quality and likeness to the real US dollar. There has been significant
counterfeiting of Euro banknotes and coins since the launch of the currency in 2002, but
considerably less than for the US dollar.
Functions
In Money and the Mechanism of Exchange (1875), William Stanley Jevons famously analyzed
money in terms of four functions: a medium of exchange, a common measure of value (or unit of
account), and a standard of value (or standard of deferred payment), and a store of value. By
1919, Jevons's four functions of money were summarized in the couplet:
Money's a matter of functions four,
A Medium, a Measure, a Standard, a Store
This couplet would later become widely popular in macroeconomics textbooks. Most modern
textbooks now list only three functions, that of medium of exchange, unit of account, and store
of value, not considering a standard of deferred payment as it is a distinguished function, but
rather subsuming it in the others.
There have been many historical disputes regarding the combination of money's functions, some
arguing that they need more separation and that a single unit is insufficient to deal with them all.
One of these arguments is that the role of money as a medium of exchange is in conflict with its
role as a store of value: its role as a store of value requires holding it without spending, whereas
its role as a medium of exchange requires it to circulate. Others argue that storing of value is just
deferral of the exchange, but does not diminish the fact that money is a medium of exchange that
can be transported both across space and time. The term "financial capital" is a more general and
inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender.
Medium of exchange
When money is used to intermediate the exchange of goods and services, it is performing a
function as a medium of exchange. It thereby avoids the inefficiencies of a barter system, such as
the "coincidence of wants" problem. Money's most important usage is as a method for comparing
the values of dissimilar objects.
15. T h e E v a l u a t i o n o f m o n e y Page 15
Measure of value
A unit of account (in economics) is a standard numerical monetary unit of measurement of the
market value of goods, services, and other transactions. Also known as a "measure" or "standard"
of relative worth and deferred payment, a unit of account is a necessary prerequisite for the
formulation of commercial agreements that involve debt. Money acts as a standard measure and
common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is
necessary for developing efficient accounting systems.
Standard of deferred payment
While standard of deferred payment is distinguished by some texts, particularly older ones, other
texts subsume this under other functions. A "standard of deferred payment" is an accepted way to
settle a debt – a unit in which debts are denominated, and the status of money as legal tender, in
those jurisdictions which have this concept, states that it may function for the discharge of debts.
When debts are denominated in money, the real value of debts may change due to inflation and
deflation, and for sovereign and international debts via debasement and devaluation.
Store of value
To act as a store of value, money must be able to be reliably saved, stored, and retrieved – and be
predictably usable as a medium of exchange when it is retrieved. The value of the money must
also remain stable over time. Some have argued that inflation, by reducing the value of money,
diminishes the ability of the money to function as a store of value.
Money Circulation flow
A model that indicates how money moves throughout an economy, between businesses and
individuals. Investors spend their income by consuming goods and services from
businesses, paying taxes and investing in the stock market. Businesses use the money spent by
individuals while consuming and the money raised from selling stock to pay for capital to run
their business, purchase material to manufacture products and to pay employees.
All expenditures from individuals become the income of the businesses, and the expenditures of
the businesses become the income of the individuals.
16. T h e E v a l u a t i o n o f m o n e y Page 16
Flow of expenditures for consumption and taxes
Flow of productionof goods and services
Flow of productive services
Flow of incomes
Exhibit 1.0
The circular flow of economic activity is a model showing the basic economic relationships
within a market economy. It illustrates the balance between injections and leakages in our
economy. The circular flow model shows where money goes and what it's exchanged for. The
model includes households, businesses and governments. We also have the banking system that
facilitates the exchange of money and, as we'll see in a minute, helps to productively turn savings
into investment in order to grow the economy. In the circular flow of the economy, money is
used to purchase goods and services. Goods and services flow through the economy in one
direction while money flows in the opposite direction.
The factors of production include land, labor, capital and entrepreneurship. The prices that
correspond to these factors of production are rent, wages and profit. People in households buy
goods and services from businesses in an attempt to satisfy their unlimited needs and wants.
Households also sell their labor, land and capital in exchange for income that they use to buy
goods and services that firms produce. Businesses sell goods and services to households, earning
revenue and generating profits. Businesses also pay wages, interest and profits to households in
return for the use of their factors of production. Governments levy taxes on households and
businesses in order to provide certain benefits to everyone.
Producing Units
MainlybusinessandGovernment
Financial
Intermediaries
Bank etc
ConsumingUnits
Mainlyhouseholds
17. T h e E v a l u a t i o n o f m o n e y Page 17
Findings & Conclusions
(1) Money is the generally excepted way of exchange for goods & service.
(2) There are various types of moneys are available to the world.
(3) When money was not invented people exchange their goods and service in various ways
like barter system.
(4) Barter, an individual possessing any surplus of value, such as a measure of grain or a
quantity of livestock could directly exchange that for something perceived to have similar
or greater value or utility, such as a clay pot or a tool.
(5) Money's a matter of functions four: A Medium, a Measure, a Standard, and a Store.
(6) From the past precious metal are accepted in option of money.
(7) The precious metals like gold, stone etc are used for exchange goods and service.
(8) The circular flow of economic activity is a model showing the basic economic
relationships within a market economy.
(9) The factors of production include land, labor, capital and entrepreneurship
18. T h e E v a l u a t i o n o f m o n e y Page 18
References
Davies, Glyn, ‘’A History of Money’’, University of Wales, 1994, p.51.
Davies, Glyn, ‘’A History of Money’’, University of Wales, 1994, p.146-151.
Davies, Glyn, ‘’A History of Money’’, University of Wales, 1994, p.172, 339.
Mishkin, Frederic S. (2007). The Economics of Money, Banking, and Financial Markets
"The Etymology of Money". Thewallstreetpsychologist.com.
Mauss, Marcel. The Gift: The Form and Reason for Exchange in Archaic Societies.
David Graeber: Debt: The First 5000 Years, Melville 2011.
Politics Book 1:9 (c.350 B.C.)
Marco Polo (1818). The Travels of Marco Polo, a Venetian, in the Thirteenth Century: Being a
Description, by that Early Traveller, of Remarkable Places and Things, in the Eastern Parts of
the World
Theory of Money and Credit– Library of Economics and Liberty
Tom Bethell (1980-02-04). "Crazy as a Gold Bug"
http://www.cliffsnotes.com/study-guides/economics/money-and-banking/functions-of-
money
http://staffwww.fullcoll.edu/fchan/macro/4functions_of_money.htm
https://en.wikipedia.org/wiki/Counterfeit_money