Money and Credit Flashcards
Money?
Money acts as a medium of exchange and stores different values. Generally seen as paper money and coin.
Barter system?
Method in which goods and services are exchanged directly without a common unit.
Why money is accepted as a median of exchange?
- Authorized by the government of a country.
- In India, RBI issues currency notes on behalf of the government.
Forms of money?
Ancient period: Grains, cattle were used as money.
Medieval period: Metallic coins of gold, silver, copper.
Modern period: Paper money, coins.
Deposition of money in banks?
- People deposit money in the bank and banks provide interest on the deposited amount.
- People can withdraw the money whenever they require.
Demand deposit?
Deposits in he bank that can be withdrawn on demand.
- Demand deposits share essential features of the economy and is accepted widely as means of payment along currency.
Cheque?
A paper instructing the bank to pay a specific amount from the person’s account to the person in whose name the cheque has been issued.
