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Money and Monetary Standards
Money and Monetary Standards
MONETARY
STANDARDS
OBJECTIVES
• Came from the name Moneta – another name for the Roman
goddess Juno.
• Defined as a medium of exchange and as a measure of value
• Anything which could be used as a medium of exchange which is
widely acceptable for payment of goods and services
BRIEF HISTORY OF MONEY
BARTER
BARTER
USE OF VARIOUS PRODUCTS
USE OF METALS
Maker
FORMS OF MONEY
• Bank Draft
• Issued by banks against their own account
• Also known as manager’s checks or cashier’s checks
• types:
• demand draft (sight draft)
• Time draft (post-dated)
• Local draft (single country)
• International draft (global)
• Automatic bank draft (regular intervals)
FORMS OF MONEY
• Money order
• Issued by the post office ordering the sum of money to be paid to the payee
• Warehouse receipt (WR)
• Title to goods
• Proof of possession or control of goods
KINDS OF MONEY ACORDING TO MATERIAL
•Metallic
•Paper
KINDS OF MONEY ACCORDING BASIS OF LAW
•Fiat money
•Legal tender/ representative money
CHARACTERISICS OF GOOD MONEY or Medium
of Exchange
• Scarcity
• Rare or hard to find makes it valuable
• Divisibility
• Can be broken down into smaller units/ denominations
• Portability
• Ease in handling or carrying
• Durability
• Long lasting
• Metal, plastic polymer
MONEY AND THE ECONOMY
• COMMODITY STANDARDS
•Value of monetary unit is equal to the
value of a designated quantity of a
particular commodity
• NON- COMMODITY STANDARDS (FIAT)
•Value or purchasing power is not equal to
the value of any specific quantity of a
particular commodity
COMMODITY STANDARDS
•Gold standard
•Gold coin standard
•Gold bullion standard
•Gold exchange standard
•Bimetals
GOLD STANDARD