The age of commodity money gave way to the age of paper The essence of is now laid bare. Money is wanted not for its.own sake for the things it will buy. We do not wish to con unusual muse money directly; rather, we use it by getting of it. Even when we choose to keep money, it is value and able only because we can spend it later on.
The use of paper currency has become wide wants,” spread because it is a convenient medium of change. Currency is easily carried and stored. The value of money can be protected from counter pairing by careful engraving. The fact that private indirect viduaIs cannot legally create it scarce. Given this limitation on supply, currency has Value. It can buy things. As long as people can pay their bills the currency, as long as it is accepted as a means of payment, it serves the function of money.
Most money’ today is checking posits in a bank or other financial institution. Checks are accepted in place of cash payment for many goods and services. In fact, if we calculate the total dollar amount of transactions. nine-tenths take place by bank money. the rest by currency. . . Today there is rapid innovation in developing ferent forms of money, For example, some financial institutions will now link a checking account to a savings account or even to a stock portfolio. allowing customers to write checks on the value of their stock. Firms are working on ways for’ people to use the Internet’ to pay all their bills electronically.
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