Money originated as commodity money, but nearly all contemporary money systems are based on fiat money.Fiat money is without intrinsic use value as a physical commodity, and derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private".The money supply of a country consists of currency (banknotes and coins) and demand deposits or 'bank money' (the balance held in checking accounts and savings accounts). These demand deposits usually account for a much larger part of the money supply than currency.As noted, bank money is intangible and exists only in the form of various bank records, but still serves as money
Sunday, January 10, 2010
Thappu Evaradhi 2
Money originated as commodity money, but nearly all contemporary money systems are based on fiat money.Fiat money is without intrinsic use value as a physical commodity, and derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private".The money supply of a country consists of currency (banknotes and coins) and demand deposits or 'bank money' (the balance held in checking accounts and savings accounts). These demand deposits usually account for a much larger part of the money supply than currency.As noted, bank money is intangible and exists only in the form of various bank records, but still serves as money
