This does not affect the worksheet activity in any way. ”’ 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. 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. Firstly, money should be spent on one's necessities compared to luxuries. Alternatively, more stable currencies such as the U.S. dollar or European euro may come into widespread use. First, currency held by the U.S. treasury, the Federal Reserve banks, commercial banks, and thrift institutions is excluded from M 1 and other measures of the money supply. If the government backed the currency with something tangible like gold, then the supply of money would vary with how much gold was available. 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. You can view our. deposits perform the basic function of money: They are acceptable as a medium of exchange. From time immemorial, man has perceived himself as a social being, hence money spend on helping others would serve its ideal purpose. Levels of liquidity vary radically. Candidates have to raise and use private funds to finance their campaigns. If the price level is 1, then the value of the dollar is 1. You would not think of stuffing $4896 in bills in an envelope and dropping it in a mailboxto pay a debt. To raise money for their campaign, politicians solicit donations from wealthy people and groups. … We need not state the price of cows in terms of corn, crayons, and cranberries. Download the full version above. The brightest students know that the best way to learn is by example! "IELTS Sample Answer & IELTS Preparation". 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. Nothing more! That fact enhances our willingness to use checkable deposits as a medium of exchange. What do you feel are the right uses of money? Copyright © 2013 - 2020 IELTS Mentor. 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. Commercial banks (”’banks”’) and savings institutions (”’thrifts”’) provide checkable deposits. Therefore, money is one of the crucial elements in human life. Money, however, is readily acceptable as payment. Worldwide fundraisers to counter these menace exemplifies the right use of money. Investing. Nor does the bakery owner want to receive, say, halibut in exchange for bagels. 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. 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 … 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. Commercial bank loans provide short-term financial capital to businesses, and they finance consumer purchases of automobiles and other durable goods. I have been teaching from Hosea for the last several weeks and also reading John Wesley’s Sermon #50 on the use of money. And coins, we know, have less intrinsic value than their face value. Check your understanding of this reciprocal relationship by determining the value of $ V and its percentage rise when P falls by 20 percent from $1 to .80. 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. Apart from money, factors are many that contribute to one's quality of life. By virtue of long-standing business practice, currency and checkable. It is used as the source to fulfill basic needs and is also a source of comfort in life. 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. Societies have used many items as money, including whales”’ teeth, circular stones, elephant-tail bristles, gold coins, furs, and pieces of paper. 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. As you will see, certain debts of government and financial institutions also are used as money. 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. 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. ”’ All checkable deposits (all deposits in commercial banks and ”’thrift”’ or savings institutions on which checks of any size can be drawn). We've got thousands of real essay examples for you to use as inspiration for your own work, all free to access and download. Fifty-cent pieces would disappear from circulation very quickly! The result? Money is important in most people's lives. A cceptability Currency and checkable deposits are money because people accept them as money. Moreover, people can convert checkable deposits into paper money and coins on demand; checks drawn on those deposits are thus the equivalent of currency. The example essays in Kibin's library were written by real students for real classes. The amount of money available to households and businesses is of keen interest to the Federal Reserve in conducting its monetary policy (a topic we cover in detail in Chapter 33). A bakery worker does not want to be paid 200 bagels per week. In equation form, the relationship looks like this: $ V 5 1y P To find the value of the dollar $ V , divide 1 by the price level P expressed as an index number (in hundredths). Money is the medium used by people to buy required goods and services. Jewish Teachings About The Right Use Of Money The major religions of the world all teach that God is good and he therefore wants every human being to lead a good, happy life. These include real estate, stocks, bonds, precious metals such as gold, and even collectible items like fine art or comic books. 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. When the value of the dollar is declining rapidly, sellers do not know what to charge and buyers do not know what to pay. Avoiding Overspending Eat at home. Inflation and Acceptability In Chapter 26 we noted situations in which a nation”’s currency became worthless and unacceptable in exchange. The M2 definition of money includes three categories of near-monies. C urrency: Coins 1 Paper Money The currency of the United States consists of metal coins and paper money. Use specific reasons and examples to support your opinion. Model Essay 1: Money plays an imperative role in oneâs life. What other factors are important for a good life. The German mark in 1923 was worth an infinitesimal fraction of its 1919 value. EssaySauce.com is a completely free resource for students. 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. ”’ Money market mutual funds held by individuals By making a telephone call, using the Internet, or writing a check for $500 or more, a depositor can redeem shares in a money market mutual fund (MMMF) offered by a mutual fund company. Money is used to do a lot, you use it to buy a house so you have somewhere to live instead of living under a bridge, you use it to keep your car running properly, and without money a lot of people wouldn’t be happy. 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. The Ascent Of Money : A Financial History Of The World Essay 1443 Words | 6 Pages. iWriteEssays.com will give you some tips on how to write money amounts in an essay. In short, people cannot convert paper money into a fixed amount of gold or any other precious commodity. It looks like you've lost connection to our server. 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. By excluding currency held by banks when determining the total supply of money, we avoid this problem of double counting. 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”’). Similarly, checkable deposits can be redeemed not for gold but only for paper money, which, as we have just seen, the government will not redeem for anything tangible. To many people, the fact that the government does not back the currency with anything tangible seems implausible and insecure. MMDAs, however, have a minimum-balance requirement and a limit on how often a person can withdraw funds. 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. Yet so many people just keep working and slaving to have MORE money. 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. Other forms of money are highly liquid, but less liquid than cash. Please note that the above text is only a preview of this essay. There is an old saying that ”’money is what money does .”’ In a general sense, anything that performs the functions of money is money. Money as Debt The major components of the money supply”’paper money and checkable deposits”’are debts, or promises to pay. It is in this sermon that Wesley develops the now famous three-point formula for the right perspective on wealth. Money derives its value from its scarcity relative to its utility (its want-satisfying power). Their commonality is that depositors can write checks on them whenever, and in whatever amount, they choose. 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. In December 1919 there were about 50 billion marks in circulation. When the consumer price index or ”’cost-of-living”’ index goes up, the value of the dollar goes down, and vice versa. Commercial banks are the primary depository institutions. 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. Cash is perfectly liquid. Specifically, each bill contains the statement ”’This note is legal tender for all debts, public and private.”’ That means paper money is a valid and legal means of payment of any debt that was contracted in dollars. Learn by example and become a better writer with Kibin’s suite of essay help services. 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. As with the currencies of other countries, the currency of the United States is token money . Higherrices lower the value of the dollar because more dollars are needed to buy a particular amount of goods, services, or resources. To what extent is the narration in Lolita more concerned with the aesthetics of writing rather than plot? Without an acceptable domestic medium of exchange, the economy may simply revert to barter. This exemplifies the innate quest within the public to be extravagant. Need of Saving Money Money by far is the most necessary thing required after basic necessities i.e. It would count for $1 of checkable deposit owned by Buck and also $1 of currency in the bank”’s cash drawer or vault. 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. It is very helpful to prepare these papers after the investigation of the samples of the essays on money. Its monetary authorities attempt to provide the amount of money needed for the particular volume of business activity that will promote full employment, price-level stability, and economic growth. It is easily lost and stolen, and can be easily destroyed by getting wet or burned. A good life would mean social, emotional and physical well-being of an individual. Credit unions accept deposits from and lend to ”’members,”’ who usually are a group of people who work for the same company. It also gives you the flexibility to make your own work schedule. A $5 bill is just an inscribed piece of paper. Again, consistency is the key. Investing your money wisely is crucial to getting the most return on your time and effort. EssaySauce.com is a free resource for students, providing thousands of example essays to help them complete their college and university coursework. Whether you are studying Economics or Business you will get money essay to write. At the extreme, a country may adopt a foreign currency as its own official currency as a way to counter hyperinflation. For example, if the price level doubles, the value of the dollar declines by one-half, or 50 percent. Yes! It also requires appropriate fiscal policy supportive of the efforts of the nation”’s monetary authorities to hold down inflation. You can view our terms of use here. It can be tempting to order take out at the end of a long day, or … The essay is full of situations and possibilities of a person’s life without money and how unbecoming that life can be. Writing essays for money gives you the freedom of working from home. The money supply in the United States essentially is ”’backed”’ (guaranteed) by government”’s ability to keep the value of money relatively stable. A bakery worker does not want to be paid 200 bagels per week. The Right Use of Money. In a general sense, anything that performs the functions of money is money. L egal Tender Our confidence in the acceptability of paper money is strengthened because government has designated currency as legal tender . If we have sick, we should need money to but medicine or see doctor. Like, you can go on a vacation only if … Conversely, lower prices increase the purchasing power of the dollar because fewer dollars are needed to obtain a specific quantity of goods and services. Yes! Also, a person can ”’cash in”’ a CD at any time but must pay a severe penalty. T wo Qualifications We must qualify our discussion in two important ways. And an economy can effectively employ money as a unit of account only when its purchasing power is relatively stable. But the decision not to back the currency with anything tangible was made for a very good reason. By Abbi Media. 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 answer to these questions has three parts. food,shelter and clothing. Just as we measure distance in miles or kilometers, we gauge the value of goods in dollars. 2 Government and government agencies supply coins and paper money. Or a long-lasting decline in gold production might reduce the money supply to the point where recession and unemployment resulted. 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. They also teach that their followers should try and make the world a better place for everyone to live in. Money is exchangeable only for paper money. The person cashing a check must endorse it (sign it on the reverse side); the writer of the check subsequently receives a record of the cashed check as a receipt attesting to the fulfillment of the obligation. We accept paper money in exchange because we are confident it will be exchangeable for real goods, services, and resources when we spend it. 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. To buy things later, they store some of their wealth as money. If the price level rises to, say, 1.20, $ V falls to .833; a 20 percent increase in the price level reduces the value of the dollar by 16.67 percent. The MMMFs in M 2 include only the MMMF accounts held by individuals; those held by businesses and other institutions are excluded. would be the next in line. All rights reserved. As a medium of exchange, money allows society to escape the complications of barter. For example, a person can convert a 6-month time deposit (”’certificate of deposit,”’ or ”’CD”’) to currency without penalty 6 months or more after it has been deposited. The website is funded by adverts which cover the cost of our hosting and domain renewal. C heckable Deposits The safety and convenience of checks has made checkable deposits a large component of the M 1 money supply. As far as the right use of money is concerned, the golden rule would be to spend it wisely focusing on righteousness and virtues. Rapid declines in the value of a currency may cause it to cease being used as a medium of exchange. Posted January 3, 2013. The general acceptance of paper currency in exchange is more important than the government”’s decree that money is legal tender, however. By definition, cash is perfectly liquid. Live life to the fullest – The real joys of life come with money. Nothing wrong with money but as the saying goes, the LOVE of money is the root of all evil. Both have their own importance and benefits. People normally do not spend all their incomes on the day they receive them. The infamous post”’World War I hyperinflation in Germany is an example. Browse essays about Importance Of Money and find inspiration. We should use money not be used by our desires to always have more. Value of Money So why are currency and checkable deposits money, whereas, say, Monopoly (the game) money is not? The utility of money lies in its capacity to be exchanged for goods and services, now or in the future. Monthly, they have to pay a large of money for water, electricity, gas bills, … . 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. 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. In complete contrast, a form of money with virtually no tangible properties whatsoever - electronic money - seems set to gain rapidly in popularity. 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. 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. 3 Runaway inflation may significantly depreciate the value of money between the time it is received and the time it is spent. It also permits us to define debt obligations, determine taxes owed, and calculate the nation”’s GDP. With money as an acceptable unit of account, the price of each item need be stated only in terms of the monetary unit. When people realized that they could write essays for money they started volunteering to write college papers. Hazlitt writes in three sentences by using elongated syntax and parallelism in his essay to give the impression of a rant so that the audience has no way to argue back with his views. Home — Essay Samples — Life — Personal finance — Money. Four years later there were 496,585,345,900 billion marks in circulation! Get an answer for 'I wrote an essay for my Speech class. This exemplifies the innate quest within the public to be extravagant. Let us discourse on this topic below. Haven`t found the right essay? Figure 31.1a shows that M1 is about equally divided between the two components. Hire writer now. It is not illegal for them to specify payment in noncash forms such as checks, cashier”’s checks, money orders, or credit cards.) The money is wont enough in our daily life. 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. Available from:
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