Money and Credit - 7040 Words

MONEY AND CREDIT Double coincidence of wants is an essential feature When both parties have to agree to sell and buy each others commodities. This is known as double coincidence of wants. What a person desires to sell is exactly what the other wishes to buy. A barter system has deficiencies. 1. Barter exchanges become extremely difficult in a large economy because of the high costs people would have to incur looking for suitable persons to exchange their surpluses 2. It is difficult to carry forward one’s wealth under the barter system. Importance of money/Money as medium of exchange. Money acts as an intermediate in the exchange process, it is called a medium of†¦show more content†¦the payer who has an account with the bank makes out a cheque for a specific amount. The money is transferred from one bank account to another bank account in a couple of days. The transaction is complete without any payment of cash. Monday, August 10, 2009 Banks use the major portion of the deposits to extend loans also. Banks mediate between those who have surplus funds (the depositors) and those who are in need of these funds (the borrowers). Banks keep only a small proportion of their deposits as cash with themselves. Banks in India these days hold about 15 per cent of their deposits as cash this is kept as provision to pay the depositors who might come to withdraw money from the bank on any given day. Since, on any particular day, only some of its many depositors come to withdraw cash, the bank is able to manage with this cash. Banks make use of the deposits to meet the loan requirements of the people. In this way .Banks charge a higher interest rate on loans than what they offer on deposits. The difference between what is charged from borrowers and what is paid to depositors is their main source of income. Role-In India, the Reserve Bank of India 1. Issues currency notes on behalf of the central government. 2. As per Indian law, no other individual or organization is allowed to issueShow MoreRelatedCredit Card Fraud And Money Laundering2028 Words   |  9 Pages Running head: CREDIT CARD FRAUD MONEY LAUNDERING 1 White Collar Crime: Credit Card Fraud and Money Laundering Datuawn Frazier Lillian Esedebe Morrisville State College CREDIT CARD FRAUD MONEY LAUNDERING 2 Abstract In this paper we will be exploring white collar crime and specifically credit card fraud and money laundering. We will be discussing what exactly credit card fraud entails and how it takes places explaining the different methods of how criminals can stealRead MoreDreams Of Avarice : The Rise Of Money And Credit Essay1317 Words   |  6 PagesIn The Ascent of Money Niall Ferguson gives an in-depth historical look at money and finance. 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As a society, we are becoming increasingly dependent on using credit cards and recognizing the positives and negatives is key to responsible credit card use. The advantages of credit cards have revolutionizedRead MoreCash And Credit Cards : Cash Or Credit Card965 Words   |  4 PagesIn today’s economy, cash or a credit card is needed to meet the basic human needs. It is an apparent fact that we need cash or credit cards to purchase items such as food, clothing, and to buy gas. Also, when you are out shopping and discover that you have used all the cash in your possession, it is then that you realize that the advantage of having a credit card. Furthermore, with cash, you are restricted to the amount in your wallet or purse; however, a credit card allows you to pay for yourRead MorePersonal Financial Plan Part II1330 Words   |  6 Pagesgallon. Driving to work became even more expensive, and stressful, at a time when I was worried about even keeping my job. Inflation was the main reason behind my debt. I relied on my credit cards to purchase items I couldn’t afford at that time. The fact that my income didn’t inc rease made me fall behind on my credit card payments which led to late fee charges. Role of government The economy can be impacted by the U.S.government through two major types of economic policy. The first type is called