Types of Money
The most important types of money are:
• commodity money: The value of commodity money is about equal to the value of the material contained in it. The principal materials used for this type of money have been gold, silver, and copper.
• credit money: Credit money is paper backed by promises by the issuer, whether a government or a bank, to pay an equivalent value in the standard monetary metal, such as gold or silver. Paper money that is not redeemable in any other type of money and the value of which is fixed merely/just by government edict is known as fiat money.
• fiat money: Credit money becomes fiat money when the issuing government suspends the convertibility of credit money into precious metal. Most fiat money began as credit money, such as the U.S. note known as the greenback, which was issued during the American Civil War. Most minor coins in circulation are also a form of fiat money, because the value of the material of which they are made is usually less than their value as money.
Questions:
1. Give the definition of Money?
2. Make a comparison between money and barter?
3. List the three Essential characteristics of money?
4. List the Many types of money?
5. Give a definition of Electronic money?
6. Make a comparison between the Expansionary monetary policy and Contractionary monetary policy?
7. Translate the following paragraph:-
Money
The central bank usually has three main mechanisms for controlling the money supply. It can sell treasury securities, which reduces the money supply (because it accepts money in return for a promise to pay in the future). It can also purchase treasury securities, which increases the money supply (because it pays out hard currency in exchange for accepting securities). Finally, the central bank can adjust the reserve requirement. The reserve requirement is directly related to the money multiplier (When interest rates go down, money supply increases. Businesses and consumers have a lower cost of capital and can increase spending and capital development projects. This is encourages growth. Conversely, when interest rates go up, the money supply falls. The central bank increases interest rates to reduce inflation).
المادة المعروضة اعلاه هي مدخل الى المحاضرة المرفوعة بواسطة استاذ(ة) المادة . وقد تبدو لك غير متكاملة . حيث يضع استاذ المادة في بعض الاحيان فقط الجزء الاول من المحاضرة من اجل الاطلاع على ما ستقوم بتحميله لاحقا . في نظام التعليم الالكتروني نوفر هذه الخدمة لكي نبقيك على اطلاع حول محتوى الملف الذي ستقوم بتحميله .
الرجوع الى لوحة التحكم
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