Resultado de la entrevista aplicada Universo: 13 funcionarios

The functions of money can be seen from the major problems of barter system been solved by the modern day money. These functions serves as relieve from obstacles of trade by barter. These are what money could be used for or what it does, they include the following:

a) A medium of exchange: Money facilitate the exchange of goods and services because people exchange the goods and services they produce for money and then use the money realised to buy other goods and services they want, which was hitherto not possible during barter and enabled man to overcome the problem of double coincidence of want.

b) A unit of Account: Money serves as a unit in term of which goods and service could be expressed and recorded

c) A measure of value: Money serves as a unit in which the value of goods and services could be established. This allow us to compare any two or more goods or services.

d) A store of value: Money is a good store of value providing purchasing power in a general form that can be used to meet future needs of goods and services. Under the barter system, articles of trade are easily perishable and cannot be stored for future transaction.

e) A standard of deferred payment: Money makes it possible for people to enter into contract, such as lending and enjoyment of services for fixed amount of money payable at future date. The exchange rate problem makes this impossible under the barter system.

The Features of Money

The features of money are basically major qualities that anything called money is expected to possess. These features or qualities are otherwise known as attributes or characteristics of money. They include the following among others;

i) General acceptability: It must be acceptable by all economic agents in the country in which it is used in payment for goods and services, and in settling debts and obligations at all time.

ii) Divisibility: It should be available in units of a standard sufficiently divisible to facilitate the purchase and sale of goods and services over a wide range of prices.

iii) Durability: It should be able to last for a long time without losing its value. This is the reason why high quality papers are used to print paper currency and precious metals are used in minting coins.

iv) Portability: Money should be conveniently carried about for easy transfer to other people during transactions.

v) Homogeneity: One unit of money must be the same in all respect (i.e.

identical) everywhere throughout the country. This will promote general acceptability.

vi) Relatively Scarce: It must be unique, not something that can be found easily anywhere and it must not be supplied in excess so as not to lose its value whereby it will not be able to serve effectively as a store of value and a standard of deferred payment.

vii) Malleability: This is a characteristic of coin – money. The precious metal use for money must be re-coinable when the need arise

Self Assessment Exercise

i. Discuss some of the characteristics of Money.

ii. What are the functions of money in a modern economy?

iii. Which of the function of money is (are) synonymous to problem of inflation?

iv. Examine the most important of the function of money v. Which of the qualities of money is related to inflation?

vi. In your own Opinion, what is(are) the reason(s) for rejection of coin-money

4.0 Conclusion

The introduction of money has enabled man to overcome the problems associated with the barter system or rather has put barter system into

―extinction‖. And that barter system is a kind of counter trade since the two include exchange of commodities for commodities or services. The unit also sufficiently enumerates and explained the several function money performs and that for anything be considered as money it most exhibit some certain characteristics.

5.0 Summary

This unit explored the barter system and it attendant problems, it also examine the evolution of fiat money and explained the relationship between counter trade and barter trade. It also explained the features and functions of money. In sum, this unit explored the role of money in every modern economy.

6.0 Tutor-Marked Assignment

i) What do you understand with barter system, what are its allied problems?

ii) Examine the nexus between the barter systems and counter trade.

iii) What are the functions of money in a modern economy?

iv) Which of the function of money is (are) synonymous to problem of inflation?

v) Examine the most important of the function of money vi) Which of the qualities of money is related to inflation?

vii) In your own Opinion, what is(are) the reason(s) for rejection of coin-money in Nigeria

viii) Would there be problem of inflation in the absence of money?

ix) Evaluate the role of money in any economy.

x) Is money a source of vice or virtue?

7.0 References/Further Readings

Attah B.O, Bakare, T.A. & Daisi, O.R., (2011); Anatomy of Economics Principles, Q&A (Macroeconomics), Raamson Printing Press, Oke-Afa, Isolo, Lagos, Nigeria

Amacher, R and Ulbrich, H, (1986); Principles of Economics, South Western Publications Co. Cincinnafi, Oliso

Bakare –Aremu T.A, (2013); Fundamental of Economics Principles (Macroeconomics), Raamson Printing Press, Oke-Afa, Isolo, Lagos, Nigeria

Bakare I.A.O, Daisi, O.R., Jenrola, O.A., & Okunnu, M.A., (1999): Principles and Practice of Economics (Macro Approach), Raamson Printing Press, Mushin, Lagos, NigeriaDennis R. A. et-al; International Economics, Mcgraw Hill Irwin, 8^th edition.

Familoni K.A, (1990); Development in Macroeconomics Policy, Concept Publications, Lagos, Nigeria

Fashina E.O, (2000); Foundations of Economics Analysis (Macro Theories), F.E.F International Company, Ikeja, Lagos, Nigeria

Jhingan M.L, (2010); Macroeconomics Theory, 12^th edition, Vrinda Publications (P) Ltd. Delhi, India

Jhingan M.L, (2010); International Economics, Vrinda Publications (P) Ltd.

Delhi, India

Lipsey R.G, (1979); An Introduction to Positive Economics, Hayper & Raw, London

Umo J.U, (1986); Economics; An African Perspectives , Johnwest, Lagos Nigeria.

Gordon Robert J. (2009). Macroeconomics (Eleventh ed.). Boston: Pearson Addison Wesley. ISBN 9780321552075

UNIT 2: THE EVOLUTION AND NATURE OF MONEY