Nature and functions of money , Managerial Economics

Nature and Functions of Money

The concept of money is very difficult to define . it is belongs to the category of things which are not amenable to any single definition. It is partly so because in the economy money performs not one but four important functions with each function providing criterion of moneyless and partly because these criteria are satisfied in different degrees by different assets. Since moneyless is at best a matter of degree, it is possible to draw only an arbitrary dividing line between money and other non money assets. Money is only one among many kinds of financial assets which consumers business firms government and other economic units hold in their assets portfolios . however the economists emphasis on money per se is justified because unlike the other financial assets savings deposits , government and corporate bonds money is the essential ingredient in conducting most of the economic transactions in the economy . furthermore, the demand for money ,like that for an input is a derived demand.


Money is a species of a large genus one among the class of things which perform monetary functions in the economy. Some goods perform all the four essential monetary functions act as a unit of account ,m a medium of exchange, a store of value and a standard of deferred payments and no other e.g. paper currency while other goods perform one or more monetary and non monetary functions in the economy. clarifies the position. A is the class of things which perform one or more monetary functions in the economy while B is class of things , included in A which perform all the four monetary functions in the economy .it is easier to understand what money consists of than to give any universally acceptable definition of money. As Harry G. Johnson has rightly stated the definition of money is one of the three unresolved issues sin the monetary theory. Consequently, ecortomists have been in open disagreement on the issue of defining money .

Posted Date: 12/1/2012 4:52:45 AM | Location : United States







Related Discussions:- Nature and functions of money , Assignment Help, Ask Question on Nature and functions of money , Get Answer, Expert's Help, Nature and functions of money Discussions

Write discussion on Nature and functions of money
Your posts are moderated
Related Questions
Industry Paper: As a partial requirement for this course, you will have to submit a paper on an Industry of your choice. This is a highly structured paper, which consists of: 1.

Measurement of Inflation The rate of inflation is measured using the Retail Price Index.  A retail Price Index aims to measure the change in the average price of a basket of g

Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2

If the marginal product of L is MPL = 10K - L and the marginal product of K is MPK = 10L - K, then what is the maximum possible output when the total amount that can be spent on K


how to solve problems using derivatives ?

The Economics of Population Population issues became matters of economic concern when it became increasingly apparent that the problem of excess population may be a serious ob

Real and nominal wages Wages are wanted only for what they will buy, real wages being wages in terms of the goods and services that can be bought with them.  Nominal wages

CLASSIFICATION OF TAXES Taxes can be classified on the basis of: a.     Impact of the taxes It means on whom the tax is imposed.   On the other hand, incidence of the

Question 1: (a) Describe the argument that market entry erodes profits in the long run. (b) Give some reasons and discuss possible strategies used for profits to persist eve