We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Barter and Monetized Systems of Exchange - Essay Example

Comments (0)
Summary
Exchange of goods and services people produce and want is critical to satisfying the diverse wants of everyone. Such exchange is possible by using either the barter system or money as a medium of exchange…
Download full paper
GRAB THE BEST PAPER
Barter and Monetized Systems of Exchange
Read TextPreview

Extract of sample
Barter and Monetized Systems of Exchange

Download file to see previous pages... Barter and Monetized Systems of Exchange

Different items have worked as money at different times. For instance, tobacco in America, chisels in China, gold until the gold standard was abandoned in the 1930s and paper currencies thereafter. Exchange of goods and services people produce and want is critical to satisfying the diverse wants of everyone. Such exchange is possible by using either the barter system or money as a medium of exchange. Barter was prevalent medium of exchange before the advent of money. It remains the principal form of exchange even today in tribal and traditional societies where political institutions are primitive, economies are not yet monetized and social systems are based on traditional practices and communal support. Even in advanced societies and economies like the United States, barter is still carried out to a limited extent in rural areas and public and charitable activities. On the other hand, modern societies and economies like that of the United States rely on money as the main medium of exchange. They have the highly developed political institutions to regulate money and prevent exploitation, manipulation and profiteering that money makes possible; they have monetized economies that help create and accumulate wealth; and they have social awareness that is necessary for people to trust an intrinsically worthless currency note, a mere piece of paper with the central bank’s assurance in small prints, as a medium of exchange. Barter and monetized systems of exchange have their own advantages and disadvantages (benefits and costs). ...
Third, since commodities and services are exchanged directly, there are no foreign exchange fluctuation or balance of trade and payment crises. Fourthly, the division of labor is clear, as one produces what one has the means to do. Barter’s Disadvantages: The barter system has several serious disadvantages too. First, coincidence of wants might be difficult unless the net is cast widely, which makes trade cumbersome. Secondly, in barter, there is no common measure of value making it difficult to ascertain, say for instance, how many loaves of bread would be equivalent to a cow if one wants to sell bread and the other cows. Third, in many cases the commodity one wants to sell, as the cow here, might be indivisible to sell in parts to buy a few loaves of bread. Fourth, commodities and animals often deteriorate in value fast and cannot be stored for long, which makes accumulation and storing of wealth difficult. Fifth, barter makes deferred payment and contractual deal problematic. Sixth, transporting bulky commodities from place to place becomes cumbersome in a barter system of exchange. Money’s Advantages: To avoid repletion of what has been already said, money takes care of all of the disadvantages of the barter system of exchange. Sexton describes the functions of money as a medium of exchange, a measure of value, as a store of value, and as a means of deferred payment (792-794). Briefly speaking, when money is used as a medium of exchange, there is no need for coincidence of wants. Money represents the common measure of value; it is divisible into small and large amounts; it can be stored almost forever if it is put away safely; it makes deferred payment easy; and ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Columbian Exchange
Both the old and new worlds were affected, and every cargo carried something new. Traditional spices and condiments were not produced by the Native Americans. Instead, new products such as tomatoes, potatoes and corns were found. Initially, the Europeans thought that they were either a poison or an aphrodisiac.
2 Pages(500 words)Essay
Exchange rate systems
The monetary theory of the balance of payments emphasized the differences in macroeconomic adjustment under fixed versus flexible exchange rates. One consequence of fixed exchange rates is that nations may not be able to pursue independent monetary policies
5 Pages(1250 words)Essay
Foreign Exchange
The forward exchange rate for a month from now is $0.00904.80; the 3-month and 6-month quoted rates are, respectively, $0.009074 and $0.009124. The trend is for the Japanese yen to rise in value
2 Pages(500 words)Essay
Data exchange
aces rather than tessellating polygons, and communicates product geometry, product structure, and graphical display properties using an XML schema’. 3D-XML is considered as an ideal format for rapid loading and transferring of 3D data over the network due to fact that it
2 Pages(500 words)Essay
Columbian exchange
In both Afro-Eurasia and the Americas, biological evolution trailed along individual paths during the next several million years thereby leading to the creation of two principally distinct
6 Pages(1500 words)Essay
Exchange Rates
ver, in a fixed rate administration, one of the two nations, with the agreement of the other, situates the exchange rate and allows its money distribution to adjust to suit to the level needed (Barro, 2008). Furthermore, in flexible exchange rate administration, the government
1 Pages(250 words)Essay
Human Dependence on Oil
This paper seeks to explore whether alternative energy sources are the answer to ending human dependence on oil. The paper presents both sides of the argument, with a thorough analysis of how these energy sources can end the dependence on
6 Pages(1500 words)Research Paper
Exchange Rates
Below we will discuss each of these three types of risks in detail and determine the nature of the risk faced by the importer in
8 Pages(2000 words)Essay
Fixed and Floating Exchange Rate Systems
rate systems allows the currency conversion rates to auto-correct the rate of conversion of one currency into another depending on the fluctuation of the economic demands. The fixed exchange rate system is also termed as the pegged exchange rate system where one currency is
3 Pages(750 words)Essay
The Theories Of The Debt
The influence and role of debt in both democratic and neo-liberal conditions are to be considered in the process of understanding how debt should be re-conceptualized and disciplined in the contemporary democratic situations. The morality, politics and economics of debt as an element of any financial and economic construct are debatable discussions.
13 Pages(3250 words)Essay
Let us find you another Essay on topic Barter and Monetized Systems of Exchange for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us