Money in Economics

Money the word itself brings smile to majority of human beings and all of us want to have as much cash as possible and often that is the reason for stress, above is the real life situation but as far as economics is concerned money has different meaning. In economics money is something which satisfy your needs and wants so for example if you have cash than you can buy with that cash needs like food, shelter, clothing and wants like expensive cars, 3d television, holidays and so on.

In real life people consider money as absolutely important and think that without it one cannot survive but as far as economics is concerned it treats money differently, according to economics money or cash is just a medium to buy goods and services which are essential for survival. Money or cash is just paper in economics and if people start exchanging goods and services for something other than cash than cash has no value. Consider a situation where you are put in an island with millions of dollars but on that island nobody knows about dollars and it is not used as a means of exchange than all your millions of dollars are of no use and you cannot even buy a needle with all those millions of dollars

In ancient times people used to follow barter system where goods and services were exchanged for goods and services and at that time there was no money still people used to survive, so the point is that money is important because it is a means of exchange and not for any other reason.

0 comments… add one

Leave a Comment

Related pages

bill discounting definitiondisadvantages of penetration pricingsecuritizing receivablesdupont analysis equationadvantages and disadvantages of pricingpure competition market examplesmerger and acquisition advantagesbill discounting without recoursewhat is vertical mergermeaning of devaluation of currencyunsystematicwhat is the meaning of consigneewhat is the disadvantage of globalizationadvantages and disadvantages of socialist economic systemprofit ratiosloan vs overdraftwhat is substitution effectrrb regional rural bankesop full formwhat is cost pull inflationfull form of tdscash in flowexplain the difference between fixed and variable costswhat is vertical analysis in accountingadvantages and disadvantages of environmental auditadvantages of takeoversproduct bundle pricing definitionadvantages of cashless policymarginal costing approachthree golden rules of accountinginterest rate subventiongold bullion standard definitionadvantages and disadvantages of international businessforex direct quotewhat are horizontal mergerswhat is sundry assetsfmcg companies full formwhat is deferred revenue expenditureadvantages and disadvantages of debit card and credit cardimplicit explicit costmarketing skimming strategymonopolistic competition is a market situation in whichstate and explain the law of diminishing marginal utilitywhat is a indirect quotationmerits of advertisementcapm model assumptionsincome method to calculate national incomeadvantages of advertising to manufacturerssystematic unsystematic riskadvantages and disadvantages of capitalismfifo method in cost accountingdifference between perfect competition and oligopolydisadvantages of specialization in economicsadvantages and disadvantages of housing financerevaluation of assets journal entryinfosys company websitenationalisation advantages and disadvantagesadvantages and disadvantages of oligopoly competitionadvantages of convertible bondsmeaning of unsystematic riskslr & crrdefinition of retail bankinvestment appraisal methods advantages and disadvantagessocial media advantages disadvantagesmerchant banking vs investment bankingjournal entry for bills receivableadvantages and disadvantages of commodity exchangedefine forfeitinglimitation of barter systemexample of barter systemwhat is the difference between direct cost and indirect costlaw of diminishing utility example