Cognizability: By it, we mean the capability of a substance for being easily recognised and distinguished from all other substances. Further, the price system on account of the use of money becomes the fundamental characteristic of money economy. For eg: Some people cheat buy using bits of metal and stuff to form coins! The color and size of money material help the people to deal in the market. Co-existence of organized and unorganized sectors: The peculiar feature of the Indian Money Market isthe co-existence of organized and unorganized sectors. Acceptability - Everyone must accept it to purchase goods and services 2.
So, for instance, your new computer might cost you 100 to 150 bushels of corn at today's prices, but you would find it most helpful if the price were set in terms of money because it is a common measure of value across the economy. Limited supply: In order for money to retain its worth, there must be a type of limited supply. Cognizability money should be easy to recognize 7. The Committee did not make use of the concept of velocity of circulation because as a numerical constant, it is devoid of any behavioural content. Money takes various forms, such as coins, banknotes and the money that is held in savings and checking accounts. It is the person who holds the money and how he uses the money that create a result that is either positive or negative. Without , members of a society must rely on the barter system in order to trade goods and services.
Representative money is a token or certificate that can be changed for an existing commodity, such as gold stored in a bank. Even better, a long trip to market does not threaten the health or value of the bill. Use of money allows purchase and sale to be conducted independently of one another. With the ongoing fraudulent issues associated with counterfeit money, it is important to be familiar with these categories. Acceptability - Everyone must accept it to purchase goods and services.
On the other hand, due to general acceptability of money, future payments are expressed in terms of money. Money, in fact, is held to bridge over the period between receipt of income and its expenditure. Divisible - this is important so that the goods in smaller quantities could be purchased. Silver coins are not equally lasting but wear out fairly slowly. Good money is always scarce.
Click the answer to find similar. Characteristics of A Good Test 1- Validity: A test is considered as valid when it measures what it is supposed to measure. Your money acts as a common ground for determining value. Limited supply ensures that money holds its value. .
The existence of money in a modern economic society has enabled people to effectuate wide scale credit transactions. Lack of Integration: Indian Money Market is divided into several segments. Money is anything serving as a medium of exchange. The supply, and therefore the value, of 20-dollar bills—and money in general—are regulated by the Federal Reserve so that the money retains its value over time. The buying and selling of shares, debentures and securities is made possible by money. The value in exchange of all goods and services can be expressed in terms of money.
By acting as a standard of deferred payments, money helps in capital formation both by the government and business enterprises. According to him, to hold money is to keep it as a reserve of liquid assets which can be converted into real goods. He does not lose value in both cases. Congizability:One very essential condition of perfect money is that it should be easily recognizable by the aye, ear or the touch. The function of money as an asset is the direct result of one of the most important properties of money, namely, its liquidity.
The use of money facilitates exchange, exchange promotes specialisation Increases productivity and efficiency A good monetary system is, therefore, of immense utility to human society. Money as a standard of deferred payments has simplified the borrowing and lending operations. On the other hand, they may accept some other things as money winch are not legally defined as money in discharge of debts which may circulate freely. Portability means that money can easily be transported from one location to the next. It is people that give it value, or governments that give it value.
Divisibility: The money material should be capable of division; and the aggregate value of the mass after division should be almost exactly the same as before. Early forms of money were often commodity money-money that had value because it was made of a substance that had value. The unit of money must be of the respects otherwise there will be confusion in buying and selling of goods and services. Their calculations, plans, expectations, and contracts focus on money prices. Contingent Functions : Money also performs certain contingent or incidental functions, according to Prof. Money allows us to use systems of trade beyond the Barter System. Although it is an efficient store of value, money is not a perfect store of value.
Basically, money as in coinage and dollars is the expression of value and worth used as a means of exchange. It will cease to be current. Cellulose is the most abundant of all naturally occurring organic matter and probably makes up at least a third of the vegetable matter in the world. We can notice the lack ofco-operation and co-ordination between these two sectors. But the borrowers are large innumber. Stability of Value:- Good money is that whose value is fairly stable. The hero loses favor with gods.