· Money essay,Money is the most important thing in life. Money is necessary to buy the requirements of life and achieve a decent life for man. Money saves the dignity of the human and helps him to overcome the problems. People need money in everything in their lives, such as education, health care and all aspects of blogger.comted Reading Time: 1 min Money is no exception. Today in our essay Our English academic writing service will tell you about the amazing power of money, and about its role in the life of modern people. If you have difficulties with writing papers - please contact us for help at any time of the Essay on the Attributes of Money: Money is defined as anything which is generally acceptable and accepted in exchange for goods and services. In ancient times commodities were directly exchanged for goods and services. This was known as the barter system. But Estimated Reading Time: 6 mins
Importance of money in our life | Essay and speech
Money has been defined differently by different economists. Some, like F. Walker, define it in terms of its functions, while others like G. Cole, J. Keynes, Seligman and D. According to Prof. Money in a modern economy performs important functions which have been classified by Kinley as follows:. a Primary functions also called fundamental and original functions like the medium of exchange and measure of value.
essay on money Secondary functions like standard of deferred payments, essay on money, store of value and transfer of value. c Contingent functions like distribution of income, measurement and maximisation of utility etc. Money serves as a medium of exchange and essay on money the buying and selling of goods, thereby eliminating the need for double coincidence of wants as under barter. A man who wants to sell wheat in exchange for rice can sell it for money and purchase rice.
Money has also removed the difficulty of barter system by serving as a common measure of value. The values of various commodities are expressed in terms of money. Money as a measure of value has made transactions simple and easy. It may be understood that this function of money follows from the first basic function medium of exchange. It is because money is used as a medium to exchange goods, that each good gets a value in terms of money called price.
As such, money also serves as a unit of account. In India, the unit of account is the Rupee, in USA, the Dollar; in USSR, the Rouble and the Yen in Essay on money. Classical economists did not recognize the store of value function of money. Keynes laid stress on this function of money.
People store essay on money to provide again the rainy day and to meet unforeseen contingencies, essay on money.
According to Keynes, people also store money to take advantage of the changes in the rate of interest. Money as a store preserves value through time and space. Money as a store of value through time means the shifting of purchasing power from the present to the future and as such it serves as an important link between the present and the future.
Money is an asset or a form of wealth because it is a claim. It is the most convenient way of laying claim to such goods and services as one wishes to buy. Thus, rather than keeping their wealth in the form of non-liquid assets like houses, shares, etc. Money is the most liquid of all assets i, essay on money. In fact, essay on money, all assets like bonds, saving accounts, treasury bills, government securities, inventories and real estate do serve as stores of value, but they differ in the degree essay on money liquidity; money amongst these possesses highest degree of liquidity and that is why people prefer it most as a store of value.
However, we should not give it undue importance because the value of money does not remain stable through time. As prices rise, people try to get rid of money as its value falls. Moreover, in modern economies storing wealth in the form of money is unimportant as it is done in the form of interest-bearing securities. Money as a store of value essay on money space continues to be important; for instance, an Indian businessman who sells his essay on money and property and goes to USA and settles down there is a case of exporting value through space.
In ancient times, gold and silver coins were used as a essay on money of value followed by currency notes. In advanced countries today money is stored in the form of bank deposits. Money has always been used as a standard of deferred payment, essay on money. This function of money has attained more importance in modern times with the extension of trade based on credit. As a result of this function, it has become possible to express future payments in terms of money.
A borrower who borrows a certain sum in the present undertakes to pay the same in future. Similarly, a person who purchases on credit agrees to pay in future when his bills become due. Money as a standard of deferred payments is performing useful function enabling the current and present transactions to be discharged in future.
Besides, the primary and secondary functions of money, Prof. Kinley lays stress on the contingent functions of money. Money facilitates the distribution of national income among the various factors of production. Land, essay on money, labour, capital and organization all co-operate in an act of production and the product is the result of their joint efforts, which belongs to all of essay on money. Money makes the distribution of joint production, amongst various factors easy and paves the way for economic progress.
Further, a concept like utility is measured in terms of money. A consumer as well as a producer measures the utilities of different goods and factors of production with the help of money and try to get maximum satisfaction or maximum returns. Again, credit is the basis of modern economic progress. Money constitutes the basis of credit. Banks create credit not out of thin air but with the help of money. Moreover, money gives liquidity to various forms of wealth, essay on money.
A person by keeping his wealth in the form of money renders it most liquid. Thus, we find that essay on money performs many functions—a medium of exchange, a measure of value, a store of value, a standard of deferred payments and serves as a basis for credit and distribution of national income, essay on money.
These functions of money are not all of the same importance. Of all the functions, the most important function of money is that it serves as a medium of exchange and as such also becomes a means of payment. Money in the form of a generally acceptable commodity, in the process of exchange between goods, at once, becomes a unit of account and a measure of value.
The following table clearly shows the various functions of money. Money plays a vital role in the determination of income and employment.
The basic problems of macroeconomics are the determination of income, output, employment and the general price levels, including the determination of the long-run rate of growth of income.
As far as the growth theory is concerned, the supply and demand for money have been largely ignored until recently, yet all but the very simplest short-run income and price level determination models have a money market included in them.
As such, money becomes an economic force in its own right, which under certain circumstances, powerfully affects economic activities. This is the main subject matter of monetary economics. Monetary theory is that branch of economics which aims at discovering and explaining how the use of money in its various forms affects essay on money, consumption and distribution of goods.
As a matter of fact, the advocates of monetary theory plead that a large number of factors affect the volume of production, consumption and essay on money. To them, money is no more a veil, a medium to facilitate exchange of goods: but something more vital, more crucial and more important, which affects the general level of economic activity.
Monetary theorists hold that the use of money as a medium of exchange, as a store of value, as a measure of value, as a standard of deferred payments along with its contingent functions has the capacity of influencing the volume and direction of economic activity that would not occur in a barter economy.
In modern income and employment analysis, essay on money, these are two spheres of economic activity. There is, on the one hand, the real or goods sector, which has to do with forces of aggregate demand and supply and the conditions under which an equilibrium of output and employment is achieved. On the other hand, there is the monetary sphere in which the economic forces at work are those centering around the demand for money.
According to the modern view, the existence of a separate monetary sphere of activity is a fact of profound significance; what takes place in the monetary sphere may suddenly and dramatically influence the level of both output and employment.
The method by which Keynes brings money into the picture is through the development of a theory of interest in which the demand for money is dominant. The rate of interest is the link between the real sphere and the monetary sphere.
It is a factor around which the theory of investment is constructed and investment expenditure is one of the key determinants of income and employment. Navigation Home Static Main Menu Home Questions and Answers Forum Share Your Knowledge Content Quality Guidelines Disclaimer Privacy Policy Contact Us. Essay on money Shared by M. Related Articles. Money and the Smooth Working of the Economy.
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Essay on wealth 1 ( words) Money is the most basic need of life, without which no one can meet the basic needs of its daily life. We can never compare the importance of wealth to the importance of love and care. When someone needs money, it can not be fulfilled with love and if someone needs love, then he can not be fulfilled with money Money is no exception. Today in our essay Our English academic writing service will tell you about the amazing power of money, and about its role in the life of modern people. If you have difficulties with writing papers - please contact us for help at any time of the Essay on the Attributes of Money: Money is defined as anything which is generally acceptable and accepted in exchange for goods and services. In ancient times commodities were directly exchanged for goods and services. This was known as the barter system. But Estimated Reading Time: 6 mins
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