ECONOMICS PROJECT

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modern forms of money.

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ECONOMICS PROJECT:

ECONOMICS PROJECT A PRESENTATION BY – ADITYA SINHA, CLASS – Xth – A, ROLL. NO. - 1 MODERN FORMS OF MONEY

INTRODUCTION:

INTRODUCTION Before the introduction of coins and notes barter system was prevalent. In this system, goods were exchanged directly without the use of money. It was the most primitive form of reciprocal exchange. But Barter system had various limitations like – lack of double coincidence of wants, difficulty of storing value, differed payments were difficult, some goods are indivisible. Therefore, a need was felt for devising a standard and uniform medium of exchange.

HISTORY:

HISTORY After the failures of barter trade, many cultures around the world eventually developed the use of commodity money such as precious metals, barley , beads, as well as many other things that are thought of as having value. The system of commodity money evolved into a system of representative money, (such as paper money or other physical tokens, that can be exchanged for a fixed quantity of a commodity such as gold or silver). Paper money or banknotes were first used in China during the Song Dynasty. Currently , most modern monetary systems are based on fiat money. Akbar coin

MONEY:

MONEY The word "money" is believed to originate from a temple of Hera, located on one of Rome's seven hills. Money serves as a medium of exchange , a unit of accounting, and a store of value. A medium of exchange must be widely accessible, and acceptable for the purpose of buying and selling assets, goods and services. As a unit of accounting, money provides a simple device for identifying and communicating value . As a store of value, money allows the rewards of labour or business to be stored in a convenient tool .

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MODERN FORMS OF MONEY

Fiat Money :

Money created by a central authority (central bank and/or central government) and acceptable for the payment of taxes and debts is known as fiat money. The main forms are currency ( coins & notes, which have been declared to be legal tender) and creditary banking reserves ( exchange settlement funds ). In India, modern form of money includes notes and coins. Reserve Bank of India(RBI) issues currency notes on behalf of the central government. As per law, no other individual or organisation is allowed to issue currency. Moreover, the law legalises the use of rupee as a medium of payment that cannot be refused in settling transactions in India. Fiat Money

Bank Credit deposits:

Bank Credit deposits Money created by commercial depositories (banking institutions) as retail deposits, and exchangeable with legal tender of money. The other form in which people hold money is as deposits with banks. Banks accept these deposits and also pay an amount as interest on the deposits. The deposits in the bank accounts can be withdrawn by the people on their demand and hence are known as demand deposits. Demand deposits offer another facility of payment through cheque. For payment through cheque, the payer who has an account with the bank makes out a cheque. A cheque is a paper instructing the bank to pay a specific amount from the person’s account to the person in whose name the cheque has been issued.

MONEY in MODERN world:

MONEY in MODERN world In an economy, where money is in use, money by providing the crucial intermediate step eliminates the need for double coincidence of wants. Since, money acts as an intermediate in the exchange process, it is also called a medium of exchange. Currencies exchange logo

INDIAN CURRENCY:

INDIAN CURRENCY Thanks !

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