Money is general purchasing power

Money is general purchasing power - achieve this is by...

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Money is general purchasing power . It can buy anything and anywhere against itself. In order that money should perform this role as general purchasing power, it must be universally acceptable . This can be possible only when its value is fairly stable and it is not subjected to disorder frequently. In reality , however, because of its excess and flexible supply possibility, the value of money is likely to fluctuate, particularly because paper currency is worth less in its intrinsic (natural) value. Therefore the modern monetary agencies hold a considerable responsibility of maintaining the value of money to keep it as stable as possible. The attempt to
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Unformatted text preview: achieve this is by carefully controlling the supply of it. Money as general purchasing power is used as a means of exchange. Money is not normally demanded for itself but for using as a means or medium in buying and selling activities. Therefore money is judged as reliable and trustworthy or otherwise to the extent that it can perform its own functions. Therefore money is commonly defined in terms of its functions. Professor Walkers simple definition clearly brings out these functions: "Money is a matter of functions four, Medium, Measure, Standard, Store." Another definition based on its functions can be stated as, 'Money is what money does.'...
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This note was uploaded on 11/17/2011 for the course EC ec 201 taught by Professor - during the Fall '10 term at Montgomery.

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