Malaysia has a labor force of nearly 13 million people and a real GDP growth rate of more than 5% (CIA World Fact Book).
|Section 1: Functions of Money|
|Macroeconomics - Unit 9|
Is Money the Root of All Evil?
Is money (or the love of money) the root of all evil? Some people claim this to be true. Would people still commit crimes in an economy without money? The answer is "yes". Instead of stealing money, people would then steal things. Money probably makes it easier to commit crimes, but most people would agree that even without money, it's human nature and not money itself that encourages some people to engage in evil acts.
An Economy without Money
Money has existed in many different forms throughout human history: salt, tobacco leaves, cigarettes, gold, and silver. Today it includes coins, paper bills, and electronic entries. Can an economy exist without money?
In a barter economy, goods and services are directly traded for other goods and services, and no money is used. It is possible for such an economy to exist. However, trading is inconvenient and time-consuming, because buyers and sellers face double coincidences of wants. For example, let's say that you are a sandal-maker and you would like to buy milk. In order to trade, you would need to find a person who not only sells milk, but also wants to buy sandals. Then if you find such a person, you will need to negotiate how many bottles of milk equals one pair of sandals.
The Functions of Money
Money serves three important functions. Money is a
1. Medium of exchange.
Money allows you to exchange any product for money. Then with this money you can buy any other product. Thus, money makes it easier, more convenient, and less time-consuming to trade.
2. Standard of value.
|Last Updated on Saturday, 29 December 2012 07:31|