Different economists have given different definitions of money. Let us see what are the definitions given by among the well known economists.
Fiat is the Latin phrase which means let it be finished”. Now a days, the representative money has develop into the fiat money. Fiat money is that paper money which isn’t backed by gold customary or another physical commodity. This fiat money doesn’t have any intrinsic value. In 1971 the direct convertibility of dollar to gold was ended. And now we use a fiat money which does not have any intrinsic worth, a floating forex. World is moving in the direction of electronic money which is eliminating this paper money additionally.
Keynes reformulated the quantity idea of money introduced by classical economists which was based mostly on the idea of full employment. According to quantity idea of money money supply and price level are differ in a direct means in a sure proportion. But later, J.M Keynes reformulated the same quantity theory of money by adding the idea of curiosity.
There is a distinction between a money order and a cashier’s examine, and that distinction is based on the amount you need. Most banks and money-issuers have a reduce-off point for money order quantities. For instance, Bank of America’s minimize-off point is $one thousand. Anything $a thousand and beneath is a money order, and anything above $one thousand is a cashier’s test. The motive that it is best to care is that a money order normally prices lower than a cashier’s examine. For instance, at Bank of America, a money order prices $5 whereas a cashier’s check prices $10.
In Europe, paper money was first launched in Sweden in 1661. Sweden was rich in copper, thus, because of copper’s low value, terribly big cash (typically weighing several kilograms) needed to be made. The benefits of paper foreign money have been numerous: it reduced transport of gold and silver, and thus lowered the risks; it made loaning gold or silver at interest simpler, because the specie (gold or silver) never left the possession of the lender till another person redeemed the word; and it allowed for a division of currency into credit score and specie backed varieties. It enabled the sale of stock in joint inventory corporations , and the redemption of those shares in paper.