Learn with steem contest | Money

Hello everyone,
I thank @fredquantum for this educative contest.

I will be teaching us about Money

INTRODUCTION

This topic discusses the meaning of money, evolution of money, qualities of money, types of money and functions of money.

MEANING OF MONEY

Money was invented to overcome the difficulties of trade by barter. Before the development of money, goods were exchanged for goods, which is called trade by barter. Money is therefore’ anything that is generally acceptable as a mean of exchange. It can be defined as anything that is generally acceptable in a community in payment for goods and services and for settlement of debts. Generally, acceptability is the most important requirement of money; therefore, anything that is not generally acceptable by a community does not qualify as money. Money is absolutely necessary in modern economy. In modern economy, money does not necessarily need to be cash but includes bank notes, bank drafts, postal orders, etc.

EVOLUTION OF MONEY

source

In ancient times, people lived without the need for exchange as individuals were independent of one another. People were satisfied with what they produced. Exchange at that time was not for the purpose of trading but as gifts or offerings because no consideration was given to the value of things that were exchanged. However, as societies developed, the need for exchange arose. People began to have need for things they could not produce and had excess of what they produced. This gave birth to trade by barter. Trade by barter is a system of exchanging goods for goods. Trade by barter requires that if you need yam and have maize, you must look for a person who has yam and needs maize. These challenges made trading difficult. The following are the disadvantages of trade by barter.

TYPES OF MONEY

COMMODITY MONEY

Commodity money is a commodity that is usually accepted as a means of exchange. In the past, commodity money such as cowry had money value and intrinsic value of its own. It was commonly used in West Africa for a long time. Some common commodity money that were used include cattle, salt, tobacco, skin, etc.

METAL COINS

A coin is a piece of metal that has been standardised by the government or its agency. Different countries have different standardised coins for the purpose of exchange. The weight and amount are standardised and issued by the central authority responsible for the issuance of money in a country.

BANK NOTES

Bank notes are also called paper money or currency. Bank notes have no intrinsic or material value of their own but are generally acceptable as a medium of exchange to the value of the amount stated on it. The Central Bank of Nigeriaissues paper money in various denominations (N5, N20, N50, N 100, N200, N500 and N 1000)

NEGOTIABLE INSTRUMENTS

These are instruments that authorise the bearer to collect cash upon demanded amount specified on the instrument. Examples of negotiable instruments include cheques, promissory notes, postal orders, money orders, bank drafts, etc.

NEAR MONEY

Near money refers to government securities that are close substitutes for money. Government securities such as bonds and treasury bills are both short term and long term in nature, upon demand of which cash is paid within a short notice. Near money has government guarantee so it is redeemable.

TOKEN MONEY

The intrinsic value of token money is less than the nominal or face value of the money. Token money has two sets of value: the intrinsic value and the nominal or face value of the coin or paper money. The intrinsic value is the value of the piece of metal or note, while the nominal or face value is the value of the coin or note as money. However, the nominal or face value must always be higher than the intrinsic value so as to avoid holding. Examples include luncheon vouchers, fuel vouchers, value coupons, etc.

I invite @bela90 @oasiskp @manuelhooks to be part of this educative contest
#iteach #creativewriting #steemexclusive #club75 #nigeria #learnwithsteem