Money
money is a medium of exchange the use of money spent se very large part of our everyday life took around you and you could easily be able to identify several transaction involving money in any single day. You make a list of these transaction goods are being bought and sold with the use of money in some of these transaction services are being exchanged with money for some there might not be any actual transfer of money taking place now but a promise to pay money later.
have you ever wondered why transaction are made in money in the reason is simple a person holding money can exchange it. For any commodity or service that he or she might one does a beautiful person to receive payment in money and then extend the money that they won't take the case of issue manufacture he want to sell to the market and a and b with the Suman packable fastest change shoes then he has produced for money and then extend the money was with imagine how much more difficult it. Would be if the shoe manufacture had to directly change shoes for weight without the use of money he would have to look for a wheat growing farmer who are not only want to sell with but also want to buy the shoes in exchange. There is known as double coincidence of wants.
In contest in an economy where money is in use for money providing the crucial intermediate step eliminate the need for double consonant he want it is no longer. Necessary for the shoe manufacture to look over farmer who built by each use and at the same time tell him who eats or any other. Commodity in the market since money at as intermediate in the exchange process it is known as medium of exchange.
modern forms of money
We have seen that money something that connects and medium of exchange in transaction before the introduction of coins ability of object was used as money for example the very early ages Indian use cranes and cattle money.
currency
Modern forms of money currency paper notes and coins and like the things that were used as money alien modern currency is not made of precious metals such as gold, silver, and copper and unlike grain and get there and use everyday use the modern currency in without any use of its own.
Then why is it accepted as a medium of exchange it is accepted as a medium of state because the currency is authorised by the government of the country.
In India the RBI Reserve Bank of India is new currency notes on behalf of the central government as per Indian law no other individual or organisation is allowed to issue currency more evidence of legalized the use of a Rupee as a medium of payment date cannot be reduced in settling. Transaction in India no individual in India can legally refuse a payment made in the rupees widely accepted as a medium of exchange.
deposit with bank
Money is a deposit in Bank at a point of time people need only some currency for their day-to-day needs for instant worker. Who receive their salaries at the end of each month have extra cash at the beginning of the month on two people and get extra cash deposit it with the bank of opening a bank account in the name Bank separator deposit and also pay amount in Indian interest on their deposit in this way people money. Share with the banks and an amount interest paper also have the provision to withdraw the money as when they required is the money deposit into bank account can be withdrawn on demand deposit your card demand deposit.
Demand deposit offer another interesting facility it is the facility which lens in the essential characteristic of money that of a medium of exchange. Who would have real life payments being made by cheque instead of cash for payment to check the player who has an account with the bank maths after check for a specific amount check is paper is in the bank to pay amount from the person account. To the person in whose name of the cheque has been issued.
You must implement the role that the banks play here but for the banks there would be no demand deposit and no payment by cheque against the deposit the modern form of money currency and deposits are closely linked to the working of the modern banking system.
loan activities of bank
Let take a story bank for that what do you Bank do with the deposit when they escaped from the public there is an interesting because I'm at work your bank keep only a small proportion of the deposit. As cash with themselves for example banks in India did they hold about 15% of their deposited cash and thr provision to pay the depositor who might come to withdraw money from the bank on any given day she is on its. Any particular day only some of the many depositor come to the bank is able to manage with the cash payments you Exam major portion of the deposit to stand alone there is used for rose for various economic activities is a read more about this is the following. Section use the deposit to meet the loan requirement of the people in this way banks mediate between those who have surplus fund the depositor right only in need of this Bank charges higher interest rate on loan then and what and offers on depositors the difference between advantages form and what is paid to depositor is the main source of income.
Higher cost of borrowing means a large part of earning of the borrower is used to repair the wrong hands bless income left for themselves as for family in Jaunpur in certain cases the high interest rate offering can mean that I want to be repaired is greater than the income of the borrower this could lead to increasing depth at Bishop aur Ramayan Sonpur and also people who might wish to start and intra price Bible in my not being so because of the high cost of borrowing for this reason banks and cooperativesociety need to lend more that would lead to higher income and many people could then borrow people for a variety of needs that would grow crops to business setup small scale industries etc they could set up a new industry portrayed sim good,
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