Explain what you understand by representative money. (2024)

FAQs

Explain what you understand by representative money.? ›

Representative money is a certificate or token that can be exchanged for the underlying commodity. For example, instead of carrying the gold commodity money with you, the gold might have been kept in a bank vault and you might carry a paper certificate that represents-or was "backed"-by the gold in the vault.

What is the meaning of representative money? Representative money is money that is backed by a commodity. This money - normally notes - can be exchanged for the commodity backing it.

representative money. Representative money is an item such as a token or piece of paper that has no intrinsic value, but can be exchanged on demand for a commodity that does have intrinsic value, such as gold, silver, copper, and even tobacco.

Money is any item or medium of exchange that symbolizes perceived value. As a result, it is accepted by people for the payment of goods and services, as well as the repayment of loans. Money makes the world go 'round. Economies rely on money to facilitate transactions and to power financial growth.

It is used as a medium of exchange between individuals and entities. It's also a store of value and a unit of account that can measure the value of other goods. Prior to the invention of money, most economies relied on bartering, where individuals would trade the goods they had directly for those that they needed.

Various forms of representative money are still in place, including checks and credit cards. These forms of payment are used today in place of paper money. Representative money has a long history.

In short, money can be anything that can serve as a. • store of value, which means people can save it and use it later—smoothing their purchases over time; • unit of account, that is, provide a common base for prices; or. • medium of exchange, something that people can use to buy and sell from one another.

Dollar Sign/Decimal

You can write the amount using a dollar sign and decimal point by writing the dollar sign ($) and then the number of whole dollars. Next, place the decimal point. Finally, write the number of cents (¢) to the right of the decimal.

money, a commodity accepted by general consent as a medium of economic exchange. It is the medium in which prices and values are expressed; as currency, it circulates anonymously from person to person and country to country, thus facilitating trade, and it is the principal measure of wealth.

For many people, money and what one can do with money, is a measure of their identity and self-worth. "I am successful if I have a good paying job and can buy a new car every 5 years. The more money available, the better I feel about myself." On the other hand, limited money makes me feel powerless.

What are two types of money? ›

'Money is what it does' is defined by Prof. Walker. This means that money is a term which is defined by its functions some of which are medium of exchange, measure of value, unit of account, etc. It includes notes, coins, bank drafts, cheques, bills of exchange, etc.

To summarize, money has taken many forms through the ages, but money consistently has three functions: store of value, unit of account, and medium of exchange.

For example, during the British period, one rupee coin was made of silver and its value as money was same as its value as a commodity. (ii) Representative Full-bodied Money: It refers to money which is usually made of paper. The value of representative full-bodied money is much higher than its value as a commodity.

Because representative money is tied to a physical object, it is less prone to depreciation by inflation. With a representative money system, the government cannot just print as much money as they want. The amount of money they can print is limited by the amount of the commodity they have.

The dollar became fiat money when the US left the gold standard in 1971, and the dollar was no longer backed by gold. Checks, debit, and credit cards are representative money used today.

A banking representative works for a bank and provides customer service to clients. Their primary responsibilities include handling bank transfers, assisting with online accounts, completing transactions, accepting deposits, and answering banking or financial related questions.