What is Money?

p What is money

An Essay

What is money ? Page 1

The dynamics of the socio-economic structure , the trust in the government and political unrest , plagues or wars which are outside events affect the value of money (Martin Shubik 2000

Money refers to a good that serve as a store of value , a unit of account and used in transactions as a medium of exchange particularly in the facilitation of trade (Mike Moffatt . Money plays an important role in sustainable economic growth , high rate of employment and stability of prices

. Supply of money in the United States is determined by the Federal Reserve . It is the one setting targets for the growth of money supply ( HYPERLINK "http /www .newyorkfed .org " www .newyorkfed .org

Gold was then used as a currency to which other base metals are mixed In the contemporary era , gold was now separated from money . Money is simply a good used as a medium for exchange . It cannot measure wealth On the other hand , gold determines how rich an individual is (www .the-privateer .com . The creation of money does not happen in any operation of the government nor any economic activity

Money is created in the banks . When money is deposited , it increases its value because the banks can lend the deposited money to the public The public will then pay the borrowed money with a corresponding interest . Thus , money produces more assets (Mike Hewitt

Money supply is measured by the US Federal Board using three measures - M1 , M2 and M3 . M1 refers to money which can be immediately spent . This includes checking accounts , NOW accounts and cash (Ralph Merritt

Studies have shown that the value of money is really affected by external factors conditioned by specific events or activities . Nowadays money is just treated as a good used just for the transactions of trade for exchanging of commodities . The money people use today is different from the money used before . Before , money can measure how rich an

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individual is . But because of the factors brought about by the changing times , money is now different from gold which still measures wealth

Bibliography

The Case for Gold [Electronic Version] from http /www .the-privateer .com /gold1 .html

The money Supply [Electronic (2006 . Version] from http /www .newyorkfed .org /aboutthefed /fedpoint /fed49 .html

Hewitt , M (2006 . How is Money Created ? [Electronic Version] from http /www .safehaven .com /article-6284 .htm

Merritt , R . Version] from http /invest-faq .com /articles /regul-fed-m123 .html

Moffatt , M . What is money ? [Electronic Version] from http /economics .about .com /cs /studentresources /f /money .htm

Shubik , M (2000 . The Theory of Money

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