Definitions [2]
Definitions: Money
- Prof. Crowther: "Money is anything that is generally acceptable as a means of exchange and at the same time acts as a measure and store of value."
- Prof. Walker: "Money is what money does" (Shows money is defined by its functions).
- Robertson: "anything which is widely accepted in payments for goods or in discharge of other kinds of business obligations.”
- “Anything which is commonly used and generally accepted as a medium of exchange or as a standard of value.” — Dr. Kent
- G.D.H. Cole: "Money is anything which is habitually and widely used as a means of payment and is generally accepted in the settlement of debts.”
Definition: Barter System
“The direct exchange of economic goods, one for another.” — Chandler
Key Points
Key Points: Concept of Money
- Money eliminates barter system problems by providing a common medium of exchange.
- Three main functions: medium of exchange, measure of value, store of value.
- Must be generally acceptable to function as money.
- Modern economy completely depends on money for smooth transactions.
- Digital payments are the newest evolution in money's history.
Key Points: Functions of Money
- Money removes barter difficulties and supports smooth exchange.
- Primary functions: medium of exchange and measure of value/unit of account.
- Secondary functions: standard of deferred payments, store of value and transfer of value.
- Contingent functions: maximise utility and profit, distribute national income, support credit and provide liquidity.
- Overall, money is “a medium, a measure, a standard, a store” with transferability added by some authors.
Key Points: Barter System
The barter system’s limitations—double coincidence of wants, no standard value, storage issues, indivisibility, and deferred payments—led to the invention of money, which streamlined trade and economic growth.
Important Questions [14]
- Write Answer in 'One' Or 'Two' Paragraph .Explain the Primary Functions of Money.
- State Whether the Following Statements Are True Or False with Reason. Cheque is Not Legal Tender Money.
- Write Answer in 'One' Or 'Two' Paragraph.What Are the Determinants of Saving Functions?
- Explain with Reason Whether You 'Agree' Or 'Disagree' with the Following Statement:Overdraft Facility is Not Provided to the Current Account Holders.
- Distinguish Between the Following. Standard Coins and Token Coins.
- Define Or Explain the Following Concept.Token Coins.
- State Whether the Following Statement is True Or False : Token Coins Are Such Coins Whose Face Value is Greater than Their Intrinsic Value.
- In the Case of Token Coins, Intrinsic Value is Less than Their Face Value.
- D-mat Account is Useful to Investors Who Deal in Shares.
- State Whether the Following Statement is True Or False :
- Give Reasons Or Explain the Following Statement: Invention of Money is the Most Important Invention of Human Economic History.
- Explain, with Reasons, Whether You Agree Or Disagree with the Following Statements Good Money Has Many Qualities.
- Give Reasons Or Explain the Following Old Age Pension is Transfer Income.
- Explain, with Reason,Whether You Agree Or Disagree with the Following Statement :General Acceptability is the Only Quality of Good Money.
Concepts [8]
- Concept of Money
- Functions of Money
- Standard of Deferred Payment
- Standard of Transfer Payment
- Money - Store of Value
- Barter system
- Monetary Payments
- Qualities of Good Money
