Advantages And Disadvantages Of Money

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Student: Gyeth Gabriel – 151210032 Money Contents: • Introduction • Types Of Money • Commodity Money • Fiat Money • Types Of Fiat Money • USA & UAE Money Supply Charts • How Money is Created • Conclusion • References Introduction: Back in history before money was invented, people used something called “Barter Trade” to obtain what they required for their needs. What is “Barter Trade”? It is the process by which two individuals possessing two commodities which the other wanted, enter into a mutual agreement to trade their goods. Disadvantages of “Barter Trade” It doesn’t make trading efficient as it doesn’t provide the convenient form of transferability and divisibility. For Example: If…show more content…
Hence the stronger the economy the stronger its money will be perceived and sought after. Thus for economy to print more money will not necessarily create wealth for it as reliable money can only be created with the interaction of concrete goods/services that economy can produce. Money is valuable because we want it, but we can only want it if we are sure it would get us our desired goods/services. Categories of Money: M1: includes all currency money and coins, demand deposit a/c, checking a/c and Negotiable order of withdrawal a/c (NOW) it is simply the money made to make payments. M2: Is a wider category which includes all the M1 category money, and all-time related deposits, savings and non-institutional “Money Markets” (financial utilities with high liquidity and very short maturities). M2 represents money that can be easily transferred into cash. M3: includes all M2 money categories, all large time deposits, short term repurchase agreements and other larger liquid assets. (The sum of the three “M” categories of money arrives us to the total amount of money a country…show more content…
Money Supply M3 in the United Arab Emirates averaged 1112447.72 AED Million from 2006 until 2016, reaching an all time high of 1381100 AED Million in May of 2015 and a record low of 506641 AED Million in December of 2006. Money Supply M3 in the United Arab Emirates is reported by the Central Bank of the United Arab Emirates. UAE Money Supply Fact Sheet Who & How is money created? Money is created by the “central bank” or “Federal Reserve” The central does so through printing more money but as mentioned above, printed physical bills are just a small part of how wealth is created as it requires an interaction with physical goods/services. Money can be created by many ways by the government but the most used means is through: Buying “Government Fixed-income securities” in the market. What are “Government Fixed-Income Securities”? A fixed-income security is an investment that provides a return in the form of fixed periodic payments and the eventual return of principal at

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