COMMERCE 101

MONEY

Hey Readers, How you doing y'all? lolz- how are you, your family, school, friends, even those people you don't like too much... I pray God brings Matchless Peace and Love your way and to everyone you are related to in Jesus Mighty Name- Amen. Today we are talking about the most wanted thing in the world-Money!!!. Lolz- Let's Begin....

Money can be defined as any medium of exchange which is generally accepted by the people, in payment for goods and services or settlement of debt and at the same time as a measure or stock of value.

Trade By Barter is a form of Trading in which goods are exchanged, directly for other goods without the use of money as an intermediary.

Problems of Trade By Barter:

a. Problems of Double Coincidence of Wants- This involves looking for someone who needs what you have, and at the same time has what you need.

b. No Fixed Rate of Exchange- Since no fixed amount is placed on a particular good, they is always a problem.

c. It leads to waste of time and human effort- Due to the fact that involves searching for someone to exchange with, it takes time and energy.

d. No Room For Credit Transaction- It is very difficult to pay back, with items of equal size or quantity as to compare with the one bought.

e. It discourages divisibility because some goods can't be divided into small units to meet with the exchange.

f. It is difficult to store wealth or value, especially since perishable goods are involved.

Functions of Money:

# Unit of Account and Measure of Value- This ensures that value is assigned to goods and services. The value of each goods can be measured using monitoring units.

# Medium of Exchange- Money can be used to buy different variety of goods and services.

# As a stock of value- Money is a good stock of value because, wealth can be stored for future use. The Money stored will not lose its value without the use of money, it will be impossible to save for the future and provide for old age.

# Standard of Deferred Payment- Money can save as a medium, by which business transaction on credit can be settled in future.

Qualities of Money:

* Generally Excepted- It must be generally excepted by all the society.

* Relatively Scarce- This will make money to be valuable. Money must not be too scarce or too much in circulation.

* Stability- The value of money must be stable, so that people would not lose confidence in it.

* Each denomination of Money must have the same size, shape and quality.

* Divisibility- Money must be easily divided into smaller units.

* Portability- Money must be easy to carry about.

* Durability- Money must make its material that are long lasting.

* Recognisability- It must easily be recognised and identified by the people of the society.

Forms of Money:

1. Legal Tender- It is a means of Payment by which people must obey by law of a state to except its settlement of debt. This is money which has the backing of the law and it is an offence to reject it.

2. Coins- are precious metal made of silver which has a defined amount on it and also have an official stamp of authority.

3. Bank Note- are currently issued by the Central Bank. It is a Paper Money Originate from the receipt issued by Gold Smiths to those who deposited precious metal with them for safekeeping.

4. Percival Money- are representation of money which are not generally accepted, only within a certain restricted area. It is not backed up by the law.

5. Commodity Money- is a type of money which has value as money. For Example- Gold, Silver, Diamond, Cattle etc.

6. Deposited Money- is a form of money kept in the account of the bank. Any Money saved in the bank will be credited to the account of the depositor.

EVOLUTION OF MONEY

The desire for the satisfaction of wants is as old as the Theory of Creation. The early men of the stone age had wants to satisfy, of course, his wants then were limited to the bare necessities of life, like clothing, food and shelter. He readily provided these himself, but as society grew he soon discovered that in order to live comfortably, he had to supplement his own produce with those of other people around him.

For Instance, If he was a fisherman, he had to bargain for the goods produced by the farmer. He would need the works of art produced by the artist to decorate his living room. This was the beginning of barter, a system where goods served as money for the purchase of other goods.

However, barter with its complexities so on proved inadequate. For Example, A Man who has yams may want rice, the man with rice may not want yam but fish. In such a case the exchange by barter would not be possible. Some other Commodities that would generally be acceptable as a measure of value was required.

This brings us to the end of today's session. Hope this was very helpful to you, leave a comment of what you think of this tutorial and of your questions below. Have a Blessed Day and Remember You are Amazing. God Bless.