Functions of plastic money. PLASTIC MONEY 2019-01-11
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For simplicity the entire functions can be classified under three heads like primary functions, secondary functions and contingent functions. However, in a number of legal and regulatory systems the term money laundering has become with other forms of financial crime, and sometimes used more generally to include misuse of the financial system involving things such as securities, , credit cards, and traditional currency , including , , and evading of. By spending it, we can get any commodity in future. The stability of the demand for money prior to the 1980s was a key finding of and supported by the work of , and many others. After and the , most countries adopted fiat currencies that were fixed to the.
Some such as the and are legal tender, however, they trade based on the of the metal content as a , rather than their legal tender which is usually only a small fraction of their bullion value. Major nations established 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 , and accepted by governments for taxes. This excess of investment over savings is possible because new money can be created by the Government in the form of currency or by banks in the form of bank deposits. Other forms of stored value electronic money include digital wallets such as PayPal and Square or prepaid cards which allow users to deposit fiat currency for electronic money. Plastic money also known as Plastic cards acts as a vital tool for every day transaction of people today.
These are usually re-useable in that they can be 'topped up' however some cards, usually marketed as Gift Cards are not re-useable and once the credit has been spent they are disposed of. 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. Treasury coins currency or by scribbling out a check for the amount of the purchase checkable deposit. In Europe, this system worked through the period because there was virtually no new gold, silver or copper introduced through mining or conquest. Fiat currencies gradually took over in the last hundred years, especially since the breakup of the in the early 1970s. Being non-perishable and also comparatively stable in value, the value of other assets can be stored in the form of money.
In Europe, paper money was first introduced in in 1661. Song Dynasty Jiaozi, the world's earliest paper money The system of eventually evolved into a system of. Or For A Little Background. In the same way, all sections of society sell their services in exchange of money and with that buy goods and services which they need. Since Bob is not the only customer Margie has, and Margie isn't Bob's only customer, they need a unit of account that works for everyone in the economy. Commodity money: commodity money was widely used before many years back.
Bob is a business owner in the town of Ceelo. That is any amount of debt can be paid by the money. For Bob, he wants chocolate cake who doesn't? This identifies the card holder. The 80s were also a revolutionary decade for MasterCard. Photo Card: When a Photo is imprinted on the card,it helps to identify the user of the credit card and is considered to be safer. For example, now we use paper money for making exchanges but in reality the paper has no any intrinsic value or metal value. This is most useful to pay for small purchases for example in Fairs,coffee shops etc.
Money's most important function is as a medium of exchange to facilitate transactions. Introduced to the market with a 2. Bank money, which consists only of records mostly computerized in modern banking , forms by far the largest part of in developed countries. Monetization and Economic Growth: Further, as is well known, most underdeveloped countries have a large non-monetised i. The card was invented by a banker in Brooklyn, by the name of John Biggins. Money and the Mechanism of Exchange. And this is what is important for the purpose of economic development.
No country anywhere in the world today has an enforceable gold standard or currency system. In order to obtain the products of the modern industrial sector, the people engaged in the subsistence sector will make efforts to raise their output. For these reasons, paper currency was held in suspicion and hostility in Europe and America. Money is the measuring rod, i. The value of representative money stands in direct and fixed relation to the commodity that backs it, while not itself being composed of that commodity.
Producers sell their goods to the wholesalers in exchange of money. There has been a growth on electronic payment due to the shift in technology, growing access to internet among the customers and convenient modes of delivery and payment. Instead, it has value only by government order fiat. The money part of the transaction between you and the credit card company only comes into play when you pay your bill. As economies developed, commodity money was eventually replaced by , such as the , as traders found the physical transportation of gold and silver burdensome. The increase in government borrowing reduces public saving. The introduction of money helps in bringing it in contact with the modern sector.
