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Money and Banking

Money plays a fundamental role in all modern economies. Moreover, it seems a natural feature of the economy that we can’t even imagine what life would be without it, probably very difficult. Even such simple financial transactions as sale and purchase would be too difficult and burdensome.

Money is something that is taken as payment for goods, services, and debts. Money is a medium of exchange; people take money in exchange for goods and services they provide in the expectation that they can then exchange money for goods and services that they want to purchase. Without such a medium of exchange people should turn to barter – the direct exchange of goods and services for other goods and services – a very inefficient means of the exchange. With barter it is necessary to find a partner who has what you need, and he should want to buy what you are offering to exchange.

The primary and basic function of money is a means of treatment. With the help of money an exchange of goods and services happens. As already mentioned, the first basic relationship was built on a principle of goods-goods, but with the advent of money buying and selling goods or services have become much more efficient and is built on the principle of goods-money-goods. Using money as the equivalent of commodities, people began to not only save time and effort, but also the capacity of exchange between buyers and sellers has increased.

Connection of money with prices is characterized by its role of exchange and unit of account funds. Hence, the amount of money is closely linked to the price level. Less obvious, but no less real, is the effect of the amount of money for the use of resources to produce goods and services.

Bank is an ancient concept and its appearance has been associated with the emergence of idea about the exchange of money, money given in debt, centralization of other people’s money in their hands.

The history of the development of credit relations and their basic element (a bank) is more than one hundred years. All this time, they have been improving and adapting under existing economic and political structures. Banking institutions have also passed their evolutionary path – from exchange offices, providing travelers and traders with the necessary currency, to modern giants, providing its customers with hundreds of services and operating in all sectors of the economy. This process was interfered with the state that created the banking system, both economically and socially acceptable to society. The formation function is usually performed by central bank that creates a regulatory framework for the activities of commercial banks.

Money plays a fundamental role in all modern economies. Moreover, it seems a natural feature of the economy that we can’t even imagine what life would be without it, probably very difficult. Even such simple financial transactions as sale and purchase would be too difficult and burdensome.

Money is something that is taken as payment for goods, services, and debts.

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Assignment ID
100000415
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CREATED ON
July 2, 2016
COMPLETED ON
July 3, 2016
Price
$25
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Essay Example Comments
hyunj13285
December 8, 2016
hyunj13285
Thanks
s.ald198
December 6, 2016
s.ald198
late, but thanks
Georgivs
December 2, 2016
Georgivs
An excellent writer,keep it up!