What Is Money How Is It Created - 1171 Words

WHAT IS MONEY? HOW IS IT CREATED? Orthodox and Heterodox economics both examine what money is. However, their views are different and, historically, many controversies have existed around money; especially after the global financial crisis. Orthodox economists view money as a medium of exchange that replaced barter. They also view money as a store value; a derivative from the medium of exchange. Heterodox economics support that money is a social unit of account, where credits and debts are measured. They agree that money is a store of value, but because one’s wealth is another one’s debt. With these views in mind their â€Å"origin† stories are told to help understand the function of money from these two different perspectives. In most Orthodox theory, money is not important by itself. Money is important as it is linked to other variables that are of concern such as unemployment, economic growth or maybe inflation. We cannot define money as the thing used because it changes over time. It used to be rocks, wives, gold and now it is notes. Thus, we define money by its use. Money in the modern economy is a medium of exchange that replaced barter; it is spendable at face value almost immediately and is what lubricates the market mechanism. Money can also be a store value. This is a derivative of the money as a medium of exchange. People hold money to purchase something later. The orthodox view was, firstly, developed in the 1870s when economists were trying to identify theShow MoreRelatedSummary of Money as Debt Essay636 Words   |  3 PagesMoney as Debt The â€Å"Money as Debt† was created by Paul Grignon in 2006. It is the most fascinating video I have ever seen. Moreover, I am just amazed how much I have learned in just 47 minutes. This video describes how basic banking system works and answers the question where the money comes from. Years ago, bank used to create money only if they have the real gold with them or someone deposits the gold to bank. But this is not how the bank operates today. Nowadays, banks create money as long asRead MoreHow Money Came Into Existence?1538 Words   |  7 PagesMoney, whether we admit it or not, dominates our lives. Imagine life without money, what would you trade for that car you want to own, or that apartment you have your eyes upon in the posh location of your city? Your labor, services, or would you barter one of your possessions for them? If so, how much of your services would be worth that car, or what would you give up in exchange for the apartment? Predicaments similar to these led to the creation of the medium of exchange called money that solvedRead MoreAnswers to Homework #6951 Words   |  4 Pagesassociated lecture material. 1. What distinguishes money from other assets in the economy? Money is the most liquid asset. 2. What is commodity money? What is fiat money? Which kind do we use? Commodity money may be used for other purposes. Fiat money is useful only as money. 3. What are demand deposits? Why should they be included in the stock of money? Demand deposits are balances in bank accounts that can be accessed on demand by writing a check. They are money, since they are generally acceptedRead MoreAmerican Politics : A Growing Problem For The Political Process969 Words   |  4 PagesWashington has seen what the book calls a â€Å"partisan divide†. This means that politics have become so polarized on each side of the aisle, that it has caused a divide on how the country should be ran. The authors have worked extensively inside Washington over the last three decades, making this book high accurate on the events that have spiraled and created the lack of cooperation. They constitute this lack of cooperation on many different issues; including gerrymandering, money in politics, and theRead MoreSocial Security : The United States1220 Words   |  5 Pagesover 80 years social security has provided Americans with money after they reach the minimum age requirement. This money has provided retirement money for millions of people across the country but is now in jeopardy. To get an understanding of the current and future situation of social security it’s important to understand what social security is, when it was created, why it was created, and also how it has performed since it was created. After getting an understanding of social security I will thenRead MoreHow is outsourcing affecting American Citizens, its not only taking jobs away from us Americans1400 Words   |  6 PagesHow is outsourcing affecting American Citizens, its not only taking jobs away from us Americans but is also hurting our US economy. Outsourcing is when a company such as Apple sends jobs overseas to a country such as China and has factory workers there assemble the product for a much lower price. Yes this lowers the price of products but we have to take into account how many jobs this it taking from American citizens. Outsourcing jobs does lower the price of products but jobs should stay here inRead MoreCitizens United Strong Response Of The United States975 Words   |  4 Pageselections are r an. Our Supreme Court led by Justice Roberts immediately jumped on passing this law called Citizens United. Citizens United allows big corporations to spend as much money as they want in elections. This means that the corporations can put all of their money towards one candidate or they can put forth all of their money towards advertising for elections. This is good because these corporations can encourage people to become interested enough in elections to actively participate. With more peopleRead MoreDown With The Fed : Eradication Of The Federal Reserve1065 Words   |  5 Pagesbetter days, but lack a meaningful understanding of how our financial system works. Almost 100 years ago, the creation of the Federal Reserve Banking System was instated. One could argue that this system is the base of why we are 18 trillion dollars in debt, and rising. The Federal Reserve Banking System has contributed to our economic crises and should be abolished. The system is debt-based, has a monopo ly on the creation of the debt-based money, causes perpetual debt with momentum, operated by non-governmentRead MoreThe True Origin Of Debt1257 Words   |  6 Pagesthat dealt with money. Many argue that money does not buy you happiness however then explain how money dictates the lives we live. Money has a large effect in our lives but we do not realize this until we grow up and become aware of this ourselves. Nevertheless, how was debt created that we would owe an amount of money due to us borrowing it and using it for our personal pleasure? Without going in the topic of debt and money too much, we were taught at a young age how money has created a mass effectRead MoreThe Zupin Organization and Zimbawe761 Words   |  3 Pagesjudged by how many diplomas we have received, how much money we have made, how many great things we have done. We will be judged by ‘I was hungry and you gave me food to eat, I was naked and you clothed me, I was homeless and you took me in. Hungry not only for bread - but hungry for love. Naked not only for clothing - but naked for human dignity and respect. Homeless not only for want of a room of bricks - but homeless because of rejection.† -Mother Teresa. Based on the reality of what is happening