Money, Challenges And Functions Of Money And Cashless Society

Introduction

Money Before the report goes in deep, it will discuss the definition of money. Money as the economists stated is anything that is accepted by people to buy products and services or to pay the liabilities (Mishkin, 2004, p.44). First of all, the purpose of this report is to explain about the history of money and how it was developed to make selling and buying transactions easier. This Report contains four sections which are evaluation of money, functions of money, qualities of money and challenges of cashless society.

The first section is evaluation of money which includes commodity money, fait money and electronic money. The second section has six functions of money. First, money is tool of exchange goods and services which

Functions of money

3.1. Medium of Exchange If we look to how people were buying goods without money in past, we will notice that they used Barter System which is exchange goods by another goods. For instance, if baker wanted to sell bread, he had to exchange it with onions or carrots which had them or he didn’t need them. Therefore, he should sell the product again until he found what he wanted and that would consume time. (Suman, 2013) Consequently, money serves the function of exchange which will help the baker to exchange his goods with money and then he can buy anything he wants or needs and reduces the time consuming, so money overcomes the obstacle of Barter System. Moreover, money helps people to achieve the diversity of their wants and needs. (Suman, 2013) In fact, money gives opportunity to people who are specialists in specific fields. For example, if a person works in a shoes factory while they are using Barter System, the person will not be motivated to take goods for his service, but if they use money instead of goods, he will be motivated because he will buy what he needs and wants. (Suman, 2013)

3.2. Measure of

Another example of money helps to postpone the payment is the employees who work all the month and the employer postpones the payment to the end of every month as unit of exchange of their services. (Suman, 2013) 4. Qualities of Good Money

4.1. General Acceptability

It is a basic of money. Actually, money will be rejected by people unless people know that money which they hold it to purchase goods and services is accepted by others. In the past, they have to use gold or silver as medium of exchange because all people accepted. (Singh, 2013) As a result, money should be accepted by all people in the country without any problems to have good Quality (Qureshi, 2014).

4.2. Portability

For money to be good quality, it has to be easy transported. Fiat money is lesser weight than coins, so it is easier to transport small amount of paper money. (Qureshi, 2014) Besides, portability also means that money has to be easily and economically transported and the value of the money is high in small amount. For example, wheat and sugar have lower value in small bulk, so it is not capable to be used as money. As result, money is less costly and easy to be transported. (Singh, 2013)

4.3.