Money

Finance Management and Institution

Submitted To:

• Nipa Saha

Assistant Professor

Submitted by:

• Samiur Rahman Sajal

• Nigar Sultana Mousumi

• Fahmida Sheikh

• Ali Ahsan Anik

• Fatema Idrat Jahan

Content

• History of money• Types of money

• Functions of money

• Features of Money

History of money Playback

History of Money

Bartering & Exchange

Shells (1200 B.C.)

Metals(1000 B.C.)

Paper Money (1000A.D.)

Coins (600 B.C.)

Banking in

Europe (1400 A.D.)Wampum

(1637)

The Gold Standard

(1816)

Credit Card (1950)

Plastic Money (1990s)

Google Wallet & Clear Exchange

(2011)

What is money?

Money is a good that acts as a medium of exchange in transactions. It is a way for a person to trade what he has for what he wants.

Barter System

A barter system is an old method of exchange. The is system has been used for centuries and long before money was invented. People exchanged services and goods for other services and goods in return.

Shells

Coastal regions around the Indian Ocean saw the use of cowrie shells in trade as early as 1200BC

Became the first medium of exchange.

Shells prototype of money.

For the reason that barter was unfair to extent.

Coinage

• After the use of shell the first mental money was developed and introduce.

• Those coins had holes in the middle, so they could easily carry around their neck.

• They were imprinted with the faces of emperors and gods to show the value.

• Such as sliver, bronze, gold.

Leather

• In 118BC, banknotes in the form of leather money were used in China

• They were made out of deer skin• leather was used as banknotes.

Paper money

• The first known paper banknotes appeared in China in 9th century

• The travels of Marco Polo to China introduced the idea of paper money to Europe

• Paper money was developed after all the other medium of exchanged where introduced one after the other.

• Up to this day notes (paper money) is used as evidence of ability to pay.

Types of money

Commodity Money

Commodity Money The most primitive type of money is commodity money.

Some useful commodity that is in general demand is used as an exchange medium and may serve both as a means of payment and a measure of value.

Ex: tea, sugar, shells, tobacco etc.

Metallic Money

Throughout history, various metals, some of which are considered precious today, appear to have been used as a form of currency. The Bretton Woods system, under which all major currencies were theoretically exchangeable for gold, was abolished in 1971.

Paper Money

• A country's official, paper currency that is circulated for transaction-related purposes. The printing of paper money is typically regulated by a country's central bank in order to keep the flow of money in line with monetary policy.

Bank credit

A demand deposit or bank money refers to the funds held in demand deposit accounts in commercial banks. These account balances are usually considered money and form the greater part of the money supply of a country.

Electronic Money

• The money stored in certain electronic cash cards.

• Transactions are made electronically.

• Examples are Credit Card, Debit card, Charge card etc.

Functions of money

Medium of exchange

Unit of value

Standard of differed payments

Store of value

Basis of the credit system

Equalizer of marginal utilities and productivities

Features of Money

1. Money should be durable, it should not get easily decomposed or degraded.

2. Money should be handy, easily transportable.

3. Accepted – People are willing to accept

4. Divisible – it can be divided into smaller parts

5. Stable in value – The value of Money dose fluctuate, but overall it remains stable.

6. Limited supply – Supply must be scarce