Question

1- what is money and explain its evolution throughout time.

2- describe the functions of money, looking at why and how it promotes economic efficiency,

3- examine how money is currently measured

4- Identify different types of payment systems and Compare and contrast the M1 and M2 money supplies 

5- Are we heading to a cashless society

Answer 1

What is money, and explain its evolution throughout time.

Money is an economic unit accepted as the medium of exchange to facilitate an exchange for transactional purposes in the economy.  Money has undergone evolution through progressive stages; initially, people relied on agriculture, and later barter system was adopted and posed several challenges in exchanging products (Vlasov & Andrei, 2017). This resulted in the development of money, which was precious stones and commodities like seashells, wine, clothes, and leather. Metallic money was later developed, made of gold and silver, progressively money paper was developed, which acted as currency money commonly used in modern economic society

 Describe the functions of money, looking at why and how it promotes economic efficiency,

Money has several functions; these include store of value; these ensure that valuable commodities in the economy retain their value hence economic stability. Also, the medium of exchange portrays how money ensures economic efficiency by facilitating transactions in the different state economies (Vaza et al.) Moreover, money acts measure of value and the standard of deferred payments in the transactions facilitated in the economy. Money is the ultimate medium of exchange used in the economy; therefore, it is utilized in different national and international economies to ensure economic efficiency.

Examine how money is currently measured

The measure of money of known is expounded in M1 and M2. The measure is aligned to the activity taking all around the economy. The value of money is measured in the ratio scale, which is relevant to the nominal, interval, and ordinal scales, which together function as one (Haug et al., 363). The different denominational values of money used in different regions are tabulated in relevance to main denominations like Euros and dollars in the modern world.

Identify different types of payment systems and Compare and contrast the M1 and M2 money supplies 

There are various payment systems used in modern society; these comprise; Card services like the ATM, debit, credit, and prepaid services. Also, wire transfers and item processing are common. M1 involves the use of money considered liquid-like checkable, cash, and traveler’s checks (Haug et al., 363). While M2 money involves less liquid in nature, it also comprises the savings, money market funds, and certificates of deposits.

 Are we heading to a cashless society

          Transaction in society has progressively advanced from the barter trade to the development of currency coins made from copper, nickel, and bronze. Moreover, changes were still evidenced with the development of paper, which relates to the currency notes. Paper money is universally used through changes that are championed through advanced technology, which advocates for cashless transactions by using plastic money. Paper over time became inconvenient due to the risks of keeping safe, counting, and huge transactions are done by different clients (Bátiz-Lazo et al., 105). Thus, society is ending cashless transactions using cheques, credit cards, bills of exchange, and drafts. The approach is widely used due to its convenient benefits, safety in making large payments, durability, and elimination of risks.

Work Cited

Bátiz-Lazo, Bernardo, Thomas Haigh, and David L. Stearns. "How the future shaped the past: The case of the cashless society." Enterprise & Society 15.1 (2014): 103-131.

Haug, Alfred A., and Julie Tam. "A closer look at long‐run US money demand: Linear or nonlinear error‐correction with M0, M1, or M2?." Economic Inquiry 45.2 (2007): 363-376.

Vaza, John, Alistair Milneb, and Kym Brown. "The Forms and Functions of Money."

 

Vlasov, Andrei V. "The evolution of e-money." (2017).

Money is an economic unit accepted as the medium of exchange to facilitate an exchange for transactional purposes in the economy.  Money has undergone evolution through progressive stages; initially, people relied on agriculture, and later barter system was adopted and posed several challenges in exchanging products.