Money is something or a means of exchange that is considered valuable. So it is centuries old when people used it to price goods and services and settle debts. Economies rely on cash to simplify exchange and promote wealth growth. Most economists decide cash, where it is purchased, and its value. Following are the complex characteristics of cash.
Before the establishment of the medium of exchange i.e. money, humans were in a position to exchange in the form of barter to obtain the goods and services they needed. Two individuals who had some of the items each other needed could exchange.
Early barter no longer allows transferability and divisibility which facilitates buying and selling. For example, if a person has cows but wants to eat bananas, he or she will have to look for someone who now has a desire to eat not only bananas but also meat. What if that man or woman goes looking for someone who wants to eat meat but doesn’t have bananas and can only give away potatoes? To get meat, he has to find someone who has bananas and desires potatoes etc.
Erasing the transferability of barter for commodities is tedious, confusing and useless. But this is not the end of it; even if the character eventually finds someone to exchange meat for bananas, they will no longer remember that a single number of bananas is actually equal to a whole cow. Such an exchange is a question of barter and the way to find out how many bananas are actually equivalent to a cow.
Money can be called “anything that is commonly used in the payment of fees for goods or various types of enterprise obligations”. The following 4 ideologies about the definition of money are explained below:
This ideology sees cash as an option. Money has characteristics like expense, liquidity etc.
Came to remove the shortcomings of the currency barter system. Previously, humans exchanged and accepted goods and offerings to serve as a medium of exchange. This was going to create a number of shortcomings, one of which was the double misfortune of desires. In an attempt to address this problem, a desirable medium of exchange, money, came into being. What is money?
The instrument of finance varies with states and governments. There are many states that have great currencies. There is a central authority for the instrument of finance. There are different types of cash, and the latest addition to the types of cash is cryptocurrency and can be traded around the world.
These are post-money functions: divisibility, portability, acceptability, durability and stability. Protect my name, e-mail and net site on this browser the next time I comment. Money: definition, methods, characteristics, stages of development. Money is a major and standard component of modern times.
Above all, cash is an accounting unit – a socially prevalent unit by which goods are quoted. Before the creation of an alternative medium, man was forced to exchange goods and services in exchange for receiving the goods and services he needed.
It is also said that money works best with the help of humans who harness the power of money. It is man who can determine the prices of goods, practice in terms of payment and sale for money, and use it as a means of accumulation. Therefore, purely theoretically, any item that fulfills those roles can be referred to as cash.
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