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essay on the right use of money

essay on the right use of money

In a general sense, anything that performs the functions of money is money. When we see the power in us, we see the money as a necessary instrument, and we can use it appropriately and … Money Definition M 1 The narrowest definition of the U.S. money supply is called M 1 . It looks like you've lost connection to our server. EssaySauce.com is a completely free resource for students. It goes without saying that all services and products are quantified in terms of green bucks. Four years later there were 496,585,345,900 billion marks in circulation! They also teach that their followers should try and make the world a better place for everyone to live in. This essay was submitted to us by a student in order to help you with your studies. By virtue of long-standing business practice, currency and checkable. R elative Scarcity The value of money, like the economic value of anything else, depends on its supply and demand. A person can also withdraw funds from a money market deposit account (MMDA) , which is an interest-bearing account containing a variety of interest-bearing short-term securities. As far as the right use of money is concerned, the golden rule would be to spend it wisely focusing on righteousness and virtues. For all these reasons, checkable deposits (checkbook money) are a large component of the stock of money in the United States. We are concerned here with some basic questions about money and not how changes in the money supply change macroeconomic variables. Last but not to the least, one's innate qualities like kindheartedness, love towards their counterparts, the way one thing all constitutes to achieving a better quality. With a reasonably constant demand for money, the supply of money provided by the monetary authorities will determine the domestic value or ”’purchasing power”’ of the monetary unit (dollar, yen, peso, or whatever). Chapter one entitled "The Value of Money" uses the example form Daniel Defole novel "Robinson Crusoe" to explain the value of the items left on the ship before it sank. An asset”’s liquidity is the ease with which it can be converted quickly into the most widely accepted and easily spent form of money, cash, with little or no loss of purchasing power. The government has never decreed checks to be legal tender, and yet they serve as such in many of the economy”’s exchanges of goods, services, and resources. The essay is full of situations and possibilities of a person’s life without money and how unbecoming that life can be. All of our essays are donated in exchange for a free plagiarism scan on one of our partner sites. Need of Saving Money Money by far is the most necessary thing required after basic necessities i.e. In complete contrast, a form of money with virtually no tangible properties whatsoever - electronic money - seems set to gain rapidly in popularity. And the cost is significant – missed time with family, spouses, and downtime for yourself. Commercial banks are the primary depository institutions. Thirdly, the monitoring efforts have been made to combat the threats to human existence on earth like terrorism, global warming etc. for students : all the ingredients of a good essay, Home » Economics essays » The Functions of Money. That is all you can get. … The German mark in 1923 was worth an infinitesimal fraction of its 1919 value. The more liquid an asset is, the more quickly it can be converted into cash and used for either purchases of goods and services or purchases of other assets. Nothing wrong with money but as the saying goes, the LOVE of money is the root of all evil. Just as we measure distance in miles or kilometers, we gauge the value of goods in dollars. These instances of runaway inflation, or hyperinflation , happened when the government issued so many pieces of paper currency that the purchasing power of each of those units of money was almost totally undermined. This does not affect the worksheet activity in any way. The Right Use of Money. ”’ All checkable deposits (all deposits in commercial banks and ”’thrift”’ or savings institutions on which checks of any size can be drawn). In Figure 31.1b we see that the addition of all these items yields an M 2 money supply that is about five times larger than the narrower M 1 money supply. An individual devoid of mental peace would be a backlog contender towards achieving the quality of life. Money aids rational decision making by enabling buyers and sellers to easily compare the prices of various goods, services, and resources. Society uses monetary units”’dollars, in the United States”’as a yardstick for measuring the relative worth of a wide variety of goods, services, and resources. The general acceptance of paper currency in exchange is more important than the government”’s decree that money is legal tender, however. (All this despite the fact that the government says that paper currency is legal tender!) Secondly, money being spent on charity would classify the right use of it. And because it provides a convenient way of exchanging goods, money enables society to gain the advantages of geographic and human specialization. Inflation and Acceptability In Chapter 26 we noted situations in which a nation”’s currency became worthless and unacceptable in exchange. Investing. Yes! C urrency: Coins 1 Paper Money The currency of the United States consists of metal coins and paper money. Along with the other determiners and rightly spend money, life is beautiful! When the consumer price index or ”’cost-of-living”’ index goes up, the value of the dollar goes down, and vice versa. Conversely, lower prices increase the purchasing power of the dollar because fewer dollars are needed to obtain a specific quantity of goods and services. Both have their own importance and benefits. Browse essays about Importance Of Money and find inspiration. Then they can offer interest on the MMMF accounts of the shareholders (depositors) who jointly own those financial assets. For instance, if we used gold to back the money supply so that gold was redeemable for money and vice versa, then a large increase in the nation”’s gold stock as the result of a new gold discovery might increase the money supply too rapidly and thereby trigger rapid inflation. However, some among the mass believe that it is the most significant than other important factors and aspects of life. Maintaining one's social and familial relationships in an enchanting manner would be ideal for quality life. deposits perform the basic function of money: They are acceptable as a medium of exchange. L egal Tender Our confidence in the acceptability of paper money is strengthened because government has designated currency as legal tender . Apart from money, factors are many that contribute to one's quality of life. With this, the noble literate writers of the society along with the student community and young working professionals started writing papers, which helped us in collecting, essays … Again, consistency is the key. EssaySauce.com is a completely free resource for students. Here are those functions: ”’ Medium of exchange First and foremost, money is a medium of exchange that is usable for buying and selling goods and services. In the United States, a combination of legislation, government policy, and social practice inhibits imprudent expansion of the money supply that might jeopardize money”’s purchasing power. If you ask the government to redeem $5 of your paper money, it will swap one paper $5 bill for another bearing a different serial number. Similarly, because the writing of a check requires endorsement, the theft or loss of your checkbook is not nearly as calamitous as losing an identical amount of currency. Please note that the above text is only a preview of this essay. Students can use our free essays as examples to write their own. Higherrices lower the value of the dollar because more dollars are needed to buy a particular amount of goods, services, or resources. By contrast, a house is highly illiquid for two reasons. As with the currencies of other countries, the currency of the United States is token money . This exclusion is designed to enable a better assessment of the amount of money available to the private sector for potential spending. But the reason is clear: Checks are nothing more than a way to transfer the ownership of deposits in banks and other financial institutions and are generally acceptable as a medium of exchange. Money derives its value from its scarcity relative to its utility (its want-satisfying power). Governments make sure that face values exceed intrinsic values to discourage people from destroying coins and bills to resell the material that they are made out of. To conclude, I would like to reiterate that though money is eminent, when it comes to livelihood and quality of life, it would be dogmatic to assert that wealth is the most important than other factors involved in a healthy living. All three categories of near-monies imply substantial liquidity. Here are those functions: ”’ Medium of exchange First and foremost, money is a medium of exchange that is usable for buying and selling goods and services. I have been teaching from Hosea for the last several weeks and also reading John Wesley’s Sermon #50 on the use of money. Such pricelevel stability (2”’3 percent annual inflation) mainly necessitates intelligent management or regulation of the nation”’s money supply and interest rates (monetary policy) . How To Write Money Amounts In An Essay Or how to write numbers in a paper . The brightest students know that the best way to learn is by example! Also excluded from the money supply are any checkable deposits of the government (specifically, the U.S. Treasury) or the Federal Reserve that are held by commercial banks or thrift institutions. "IELTS Sample Answer & IELTS Preparation". He then found out the future value of each tool and what he expected the future... Wordcount: 316 When we want to measure and record economic value, we use money as the unit of account.The unit of account function of money refers to the fact that the prices of different goods are expressed in a common monetary unit. As far as the right use of money is concerned, the golden rule would be to spend it wisely focusing on righteousness and virtues. Yet so many people just keep working and slaving to have MORE money. But a key advantage that money has over all other assets is that it has the most liquidity , or spendability. Live life to the fullest – The real joys of life come with money. When money rapidly loses its purchasing power, it loses its role as money. EssaySauce.com has thousands of great essay examples for students to use as inspiration when writing their own essays. Money is the most important source to live a healthy and prosperous life; however, it cannot be compared with the significance of love and care. The infamous post”’World War I hyperinflation in Germany is an example. Get an answer for 'I wrote an essay for my Speech class. For instance, if 50-cent pieces each contained 75 cents”’ worth of metal, then it would be profitable to melt them down and sell the metal. Both the U.S. Mint and the Bureau of Engraving and Printing are part of the U.S. Department of the Treasury. To summarize: Money, M 1 5 currency 1 checkable deposits I nstitutions That Offer Checkable Deposits In the United States, a variety of financial institutions allow customers to write checks in any amount on the funds they have deposited. ”’ Savings deposits, including money market deposit accounts A depositor can easily withdraw funds from a savings account at a bank or thrift or simply request that the funds be transferred from a savings account to a checkable account. Learn by example and become a better writer with Kibin’s suite of essay help services. Which do you prefer? As you will see, certain debts of government and financial institutions also are used as money. Businesses and households may refuse to accept paper money in exchange because they do not want to bear the loss in its value that will occur while it is in their possession. We've got thousands of real essay examples for you to use as inspiration for your own work, all free to access and download. Like, you can go on a vacation only if … It would count for $1 of checkable deposit owned by Buck and also $1 of currency in the bank”’s cash drawer or vault. Societies have used many items as money, including whales”’ teeth, circular stones, elephant-tail bristles, gold coins, furs, and pieces of paper. Therefore, money is one of the crucial elements in human life. The simple principle is that earning money is directly proportional to the number of essays – if you write more, you earn more. A good life would mean social, emotional and physical well-being of an individual. It consists of two components: ”’ Currency (coins and paper money) in the hands of the public. The example essays in Kibin's library were written by real students for real classes. Posted January 3, 2013. Money is exchangeable only for paper money. The checkable deposits of banks and thrifts are known variously as demand deposits, NOW (negotiable order ofwithdrawal) accounts, ATS (automatic transfer service) accounts, and share draft accounts. The Ascent Of Money : A Financial History Of The World Essay 1443 Words | 6 Pages. The utility of money lies in its capacity to be exchanged for goods and services, now or in the future. Just what is money? Yes! It also requires appropriate fiscal policy supportive of the efforts of the nation”’s monetary authorities to hold down inflation. Hire writer now. What ”’Backs”’ the Money Supply? Anything that is widely accepted as a medium of exchange can serve as money. Do not use memorized examples. Savings and loan associations (S&Ls), mutual savings banks, and credit unions supplement the commercial banks and are known collectively as savings or thrift institutions , or simply ”’thrifts.”’ Savings and loan associations and mutual savings banks accept the deposits of households and businesses and then use the funds to finance housing mortgages and to provide other loans. Since the purchasing power of money and the price level vary inversely, stabilization of the purchasing power of a nation”’s money requires stabilization of the nation”’s price level. Near-monies are certain highly liquid financial assets that do not function directly or fully as a medium of exchange but can be readily converted into currency or checkable deposits. Cash is perfectly liquid. After the barter trade went out of fashion, money has taken its place and made transactions simple for the people. A bakery worker does not want to be paid 200 bagels per week. Second, there is a loss of purchasing power when the house is sold because numerous fees have to be paid to real estate agents and other individuals to complete the sale. In return for this withdrawal limitation, the financial institution pays a higher interest rate on such deposits than it does on its MMDAs. To buy things later, they store some of their wealth as money. T he Purchasing Power of the Dollar The amount a dollar will buy varies inversely with the price level; that is, a reciprocal relationship exists between the general price level and the purchasing power of the dollar. If we do not have money, we will can't get a treatment and we will get die or else. It is ubiquitous nowadays for a mediocre family to own cars. And coins, we know, have less intrinsic value than their face value. By not backing the currency, the government avoids this constraint and indeed receives a key freedom”’the ability to provide as much or as little money as needed to maintain the value of money and to best suit the economic needs of the country. Money is important in most people's lives. Learn more about our Cookie Policy & Privacy Policy. When citing an essay from our library, you can use "Kibin" as the author. The money supply in the United States essentially is ”’backed”’ (guaranteed) by government”’s ability to keep the value of money relatively stable. But it is true that government agencies”’the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA)”’insure individual deposits of up to $250,000 at commercial banks and thrifts. Checkable deposits are the debts of commercial banks and thrift institutions. If you use part of this page in your own work, you need to provide a citation, as follows: Essay Sauce, The Functions of Money. INTRODUCTION TO MONEY _____ This chapter introduces money into the discussion. MMDAs, however, have a minimum-balance requirement and a limit on how often a person can withdraw funds. Finally, it is more convenient to write a check than to transport and count out a large sum of currency. In Fred's Blog . Crusoe imputed value to each of the tools he had. And an economy can effectively employ money as a unit of account only when its purchasing power is relatively stable. ©2020 Essay Sauce / Terms of use / Content policy / Privacy policy. Paper currency and checkable deposits have no intrinsic value. This page of the essay has 3879 words. You would not think of stuffing $4896 in bills in an envelope and dropping it in a mailboxto pay a debt. By using our website and services, you agree to our use of cookies. First, it may take several months before a willing buyer can be found and a sale negotiated so that its value can be converted into cash. Monthly, they have to pay a large of money for water, electricity, gas bills, … . It also gives you the flexibility to make your own work schedule. It might seem strange that checking account balances are regarded as part of the money supply. What other factors are important for a good life. ANTIMICROBIAL ACTIVITY OF SILVER NANOPARTICLES BASED ON THEIR SHAPES, A Clockwork Orange (Burgess) and The Butcher Boy (McCabe), Impact of racial stereotypes/racism on, self-esteem amongst African-American students regarding standardized testing. To raise money for their campaign, politicians solicit donations from wealthy people and groups. ”’ Unit of account Money is also a unit of account . The Components of the Money Supply Money is a ”’stock”’ of some item or group of items (unlike income, for example, which is a ”’flow”’). The critical role of the U.S. monetary authorities (the Federal Reserve) in maintaining the purchasing power of the dollar is the subject of Chapter 33. The money is wont enough in our daily life. It is the fundamental requisite for a middle class person to meet his ends and for the higher class to get his luxurious demands fulfilled. ...(download the rest of the essay above). Credit unions accept deposits from and lend to ”’members,”’ who usually are a group of people who work for the same company. Model Essay 1: Money plays an imperative role in one’s life. Worldwide fundraisers to counter these menace exemplifies the right use of money. We should save the money that we have but not use all of it. Nothing more! Value of Money So why are currency and checkable deposits money, whereas, say, Monopoly (the game) money is not? Money presents many benefits to humans than we can imagine. What gives a $20 bill or a $100 checking account entry its value? We accept paper money in exchange because we are confident it will be exchangeable for real goods, services, and resources when we spend it. Also, money is a tool for personal development; by means the reactions we have about money we can perceive the real value of it and the value of ourselves. Similarly, people will use money as a store of value only as long as there is no sizable deterioration in the value of that money because of inflation. 2 Government and government agencies supply coins and paper money. It can be tempting to order take out at the end of a long day, or … Let us discourse on this topic below. When the value of the dollar is declining rapidly, sellers do not know what to charge and buyers do not know what to pay. If the price level is 1, then the value of the dollar is 1. A checkable deposit is merely a bookkeeping entry. Essay Sauce is the free student essay website for college and university students. Download the full version above. As we saw in Chapter 2, money is a social invention with which resource suppliers and producers can be paid and that can be used to buy any of the full range of items available in the marketplace. Other forms of money are highly liquid, but less liquid than cash. The MMMFs in M 2 include only the MMMF accounts held by individuals; those held by businesses and other institutions are excluded. Give reasons for your answer and include any relevant examples from your experience. Without money people cannot live healthy. If the price level falls by, say, one-half, or 50 percent, the purchasing power of the dollar doubles. A $5 bill is just an inscribed piece of paper. Commercial bank loans provide short-term financial capital to businesses, and they finance consumer purchases of automobiles and other durable goods. 3 Runaway inflation may significantly depreciate the value of money between the time it is received and the time it is spent. Also, a person can ”’cash in”’ a CD at any time but must pay a severe penalty. Figure 31.1a shows that M1 is about equally divided between the two components. Nearly all today”’s economists agree that managing the money supply is more sensible than linking it to gold or to some other commodity whose supply might change arbitrarily and capriciously. Essays on Money. Candidates have to raise and use private funds to finance their campaigns. Haven`t found the right essay? About 49 percent of M 1 is in the form of checkable deposits, on which checks can be drawn. It also permits us to define debt obligations, determine taxes owed, and calculate the nation”’s GDP. It is ubiquitous nowadays for a mediocre family to own cars. In the home, they use many equipments that maybe cost a lot of money for them such as: television, refrigerator, air-conditoner…. Whether you are studying Economics or Business you will get money essay to write. This means that the face value of any piece of currency is unrelated to its intrinsic value ”’the value of the physical material (metal or paper and ink) out of which that piece of currency is constructed. Most people argue that money makes the world go round while another look at money as the root of all evil; money is still a necessary because it rules the world and makes life easier. Firstly, money should be spent on one's necessities compared to luxuries. One of the best ways to reduce their home costs is saving money on their energy bills. Another indispensable factor in this context would be the success in life that one earned, both success and good life being directly proportional to each other. The M2 definition of money includes three categories of near-monies. That fact enhances our willingness to use checkable deposits as a medium of exchange. Avoiding Overspending Eat at home. Commercial banks (”’banks”’) and savings institutions (”’thrifts”’) provide checkable deposits. However, despite displaying clear terms on our sites, sometimes users scan work that is not their own and this can result in content being uploaded that should not have been. A paper dollar or four quarters in the billfold of, say, Emma Buck obviously constitutes just $1 of the money supply. The economy”’s demand for money thus depends on the total dollar volume of transactions in any period plus the amount of money individuals and businesses want to hold for future transactions. We need not state the price of cows in terms of corn, crayons, and cranberries. It is easily lost and stolen, and can be easily destroyed by getting wet or burned. For example, if the price level doubles, the value of the dollar declines by one-half, or 50 percent. A moot question pertaining to the use of money would be the meticulous ways to spend it and other factors attributing to one's quality of life? The use of electronic money is quite effective because it is fast and convenient method of payment. The coins are minted by the U.S. Mint while the paper money is printed by the Bureau of Engraving and Printing. In effect, by choosing not to back the currency, the government has chosen to give itself the ability to freely ”’manage”’ the nation”’s money supply. This exemplifies the innate quest within the public to be extravagant. For now, simply note that they make available a particular quantity of money, such as M 2 in Figure 31.1 , and can change that amount through their policy tools. Such companies use the combined funds of individual shareholders to buy interest-bearing short-term credit instruments such as certificates of deposit and U.S. government securities. With money as an acceptable unit of account, the price of each item need be stated only in terms of the monetary unit.

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