3- Lec 12 Oct 2023 ITBO_MB-QCA (1)

Money & Banking

The concept of money is integral in financial transactions.
Digital currency is becoming a part of modern lifestyle, impacting retailers and institutions.
The role of cash in monetary transactions remains significant.

Topics Discussed
1. Barter System & its issues
2. Origin of Money & its functionalities
3. How Money resolves issues for economic transactions

Medium of Exchange: Facilitates the buying and selling of goods.
Measure of Value: Provides a standard numerical measurement of goods and services.

Standard of Deferred Payment: Enables future payments and obligations.
Store of Purchasing Power: Maintains value over time, allowing savings.
Transfer of Purchasing Power: Moves value from one person to another.
Market Mechanism: Ensures efficient trade and economic activities.
Instrument of Modern Economy: Supports various economic systems.
Monetary and Fiscal Management: Aids governments in economic management.
Aids to Economic Activities: Facilitates various economic operations and transactions.

Basis of Credit: Foundation for lending and borrowing activities.
Distribution of Income: Influences how resources are allocated among participants.
Marginal Productivity & Utility: Relates to individual contributions in production processes.
Utilization of Capital: Ensures that capital is effectively employed in the economy.
Maintaining Repayment Capacity: Ensures entities can meet financial obligations.
Generalized Purchasing Power: Provides flexibility in purchases across different markets.
Development of International Trade: Facilitates transactions across borders.

Advantage to Customers: Makes it easier to obtain goods and services.
Advantage to Producers: Enhances production capabilities and market reach.
Possibility of Division of Labor: Increases efficiency in the production process.
Facilitates Trade: Simplifies exchange between parties.
Mobility of Capital: Allows for swift allocation and investment of capital.
Future Transactions: Enables planning for future financial activities.
Distribution of Rewards: Equitably shares benefits among participants.

Public Finance: Essential in managing government finances.
Accounting & Budgeting: Critical for financial planning and review.
Standard of Living: Influences the quality of life for individuals.
Social Welfare: Provides for community programs and support.
Material Progress: Drives development and economic growth.
Calculation of Economic Variables: Assists in assessing economic conditions.
Need of Government: A crucial tool for policy implementation and economic stability.

Demonstrates the shifts in payment systems over time.
Electronic Money: The rise of digital transactions.
Payment Cards: Credit and debit instruments that facilitate easier transactions.
Paper Money: Introduced to replace commodity forms of currency.
Coins: Traditional forms of currency ranging from historical shells to metals.

Commodity Money: Early forms including animal hides, shells, and goods.
Metallic Money: Involves coins made from precious metals like gold and silver.
Paper Money: Represents currency notes that symbolize value.
Credit/Digital Money: Encompasses modern financial tools like credit cards and electronic payments.