Explain and evaluate the following statements: a. The invention of money is one
ID: 1166065 • Letter: E
Question
Explain and evaluate the following statements: a. The invention of money is one of the greatest achievements of humankind, for without it the enrichment that comes from broadening trade would have been impossible. b. Money is whatever society says it is. c. In the United States, the debts of government and commercial banks are used as money. d. People often say they would like to have more money, but what they usually mean is that they would like to have more goods and services. e. When the price of everything goes up, it is not because everything is worth more but because the currency is worth less. f. Any central bank can create money, the trick is to create enough, but not too much, of it.Explanation / Answer
Providing 4 Answers according to the chegg guidelines:
A) The concept of 'Money' plays an important role in human life. Money is a result of evolution of humankind from Barter system(changing goods for goods) , but this Barter system was a vague concept in a manner that for an example If a person who got gold but also need cow for milk so now as per the barter system the price of gold and cow are the same, as a result people want a concept which should be universally accepted and give them the utility nothing more nothing less. As a result 'money' took birth and through it trade became more effective and sound. So it is rightly said Money is one the greatest creation of humankind and without it enrichment of trade as of today can't be possible.
B)The form and shape of 'Money' is Dynamic(means change with respect to enviornment) in simple terms as society advances the form of money changes. For an example if we see our history at that time money was in the form of gold,sliver and bronze it shifted to paper currency and it is to become fully digital in the coming future. In other words what money is today for the society can't be the same in future for the society.
D) Everyone on this planet wants to earn money but the question is what they get after earning it?The answer is money is just a means to get the necessary goods and services for their own survival or comfort.The value of money would become zero when it is unable to buy/avail goods and services required by the people. So in reality it is the good and the services on which the people are after and money is just a medium to provide it.
F) In economic terms when there is more liquidity the inflation is bound to rise and the value of currency starts depreciating. So the Central Banks of every nation keeps in mind that too much liquidity is bad for economy. Hence,Central Banks can create money to move the economy but not too much in any country.
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