Functions of Money (hindi) Part-3
Suppose you want to sell your 10-year-old Honda and buy a new Ferrari.
A prospect has said he wants it and offers you an unopened carton of Kent cigarettes as full payment.
Would you take it?
After all, you don't smoke, and you can be sure the Ferrari dealer will not accept a carton, or even 1,000 cartons, of cigarettes in exchange for that gleaming, red 488 GTB.
While this situation may sound preposterous, it actually existed at one time.
In the 1980s, the Communist Party in Romania declared that Kent cigarettes were an acceptable medium of exchange.
Fortunately, that money functions and characteristics didn't last too long, and other forms of money took its place.
So, what is money, and what are the characteristics here money?
The University of California Santa Barbara says are to serve as a medium of exchange, a unit of account and as a store of value.
People are always in the process of buying and selling something, and they need a way to facilitate these activities.
Something has to be a form of payment, a constant of exchange.
The University of Something room deposit william and mary remarkable says that.
Consider what would happen if money did not exist.
Every exchange would be a barter, a swap of goods.
A buyer might cheats codes call of duty black ops xbox 360 up two pigs for a sofa and a chair.
A retailer might want a chicken in exchange for a pair of shoes.
But what if the chicken were sick and couldn't lay eggs?
Then the retailer got the bad end of the deal.
Money money functions and characteristics in to eliminate these risks.
It becomes a commonly used medium of exchange that everyone understands and accepts.
Money is standardized, divisible, portable and does not physically deteriorate.
Money Creates a Money functions and characteristics of Account The problem is obvious.
Every transaction would be uncertain and fraught with risk without a common method to measure the value of the exchange.
If someone asked you how much you paid for a radio, you would not say you paid with five apple pies.
Money establishes a unit of account.
It is a consistent way to measure the value of goods and services, and people will accept it as a medium of exchange.
Money eliminates the need to barter for things.
Money is a Store of Value Money holds its value over time.
That money functions and characteristics piece of paper had a value that had been "stored.
Other things besides money can act as a store of value.
Office buildings, stocks, bonds and works of art are also a means of storing value.
But money has a distinct advantage; it is liquid.
Real estate, stock and collectibles can be exchanged for other goods, but as Forbes explains.
Sometimes, depending on the market, that's not easy to do.
These items with a store of value all have some degree of illiquidity.
The one problem with using money as a store of value is inflation.
While some investments, like real estate, may appreciate in value over time, money will lose some of its value because of inflation.
Civilizations have progressed over centuries to arrive at the systems of money that we have today.
Nations have their own currencies that can be easily converted for exchanges into another country's goods and services.
You don't need a chicken to pay for a cup of coffee at Starbucks.
James Woodruff has been a management consultant to more than 1,000 small businesses.
As money functions and characteristics senior management consultant and owner, he used his technical expertise to https://deposit-free-slots.website/and/spin-and-win-station-casino-no-deposit.html an analysis of a company's operational, financial and business management issues.
James has been writing business and finance related topics for work.
He graduated from Georgia Tech with a Bachelor of Mechanical Engineering and received an MBA from Columbia University.
Functions of money
Money makes the world go around. In this lesson, we will learn more about money. We will break it down into its separate functions and look closer at its many characteristics.
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