The Nature and Origin of Money

Содержание

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Origin of money
Characteristics & concept of money
Functions of money

Origin of money Characteristics & concept of money Functions of money

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With barter, an individual possessing a material object of value, such as

With barter, an individual possessing a material object of value, such as
a measure of grain, could directly exchange that object for another object perceived to have equivalent value, such as a small animal, a clay pot or a tool.

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Many items have been used as commodity money such as naturally scarce

Many items have been used as commodity money such as naturally scarce
precious metals, cowry shells, barley, beads etc., as well as many other things that are thought of as having value.

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Metal money

Metal money

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Metal based coins had the advantage of carrying their value within the

Metal based coins had the advantage of carrying their value within the
coins themselves. Two metals out-competed all others to become internationally accepted. Those were the two precious metals, gold and silver.

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The difference between commodity value of money and its specie value is

The difference between commodity value of money and its specie value is seigniorage

seigniorage

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Goldsmith bankers

Since no banks existed in England at the time, these

Goldsmith bankers 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. The goldsmith receipts soon began to circulate as a safe and convenient form of money backed by gold and silver in the goldsmiths’ vaults.

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Bank – банк
Note – боргове зобов'язання
A banknote (often known as a bill,

Bank – банк Note – боргове зобов'язання A banknote (often known as
paper money or simply a note) is a promissory note made by a bank

Bank + note

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money of full value -
commodity money, gold and silver money

money of full value - commodity money, gold and silver money

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Quasi-money (quasi – подібний)

These are bills, checks, etc. The term refers to

Quasi-money (quasi – подібний) These are bills, checks, etc. The term refers
securities, which can execute some functions of money, but not all of them

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Electronic money

refers to money which is only exchanged electronically

Electronic money refers to money which is only exchanged electronically

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Money is
any object or record, that is generally accepted as payment for

Money is any object or record, that is generally accepted as payment
goods and services and repayment of debts in a given country

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Characteristics of money

durable
divisible
portable
recognizable
stable value of money – for people to store

Characteristics of money durable divisible portable recognizable stable value of money –
it
economical – to minimize expenses for producing the money
uniformity of money – for easy calculation

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Functions of money

A medium of exchange
Unit of Account or Measure of Value
Store

Functions of money A medium of exchange Unit of Account or Measure
of Value
Standard of deferred payment
World money

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A medium of exchange

– that is something you acquire not because you

A medium of exchange – that is something you acquire not because
want to use it directly in consumption or production but only to trade it for something else you want.

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Unit of Account or Measure of Value

This function is sometimes referred to

Unit of Account or Measure of Value This function is sometimes referred
as a standard or measure of value.

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Store of Value

You can sell your labor for money today and

Store of Value You can sell your labor for money today and
then use the money to buy food or clothing later

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Standard of deferred payment

Money provides the unit for expressing debts or payments

Standard of deferred payment Money provides the unit for expressing debts or
due in the future
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