Macroeconomics

The history of money

Paper money came first in North America. In 1690, Massachusetts Colony issues banknotes for permanent action. The U.S. government has implemented a new subject of paper money throughout the Civil War of 1861-1865, by typing the money. There were paper money issued in the amount of $ 450 million, they are impaired by 2.5 times. With the end of the war plump money withdrawn from flow and the constancy of the dollar has been restored by the revaluation.

What is it?

The word money is derived from the Latin 'denarium', which was a coin money was defined as a special commodity playing the role of worldwide correspondent. It is a general standard of swap against goods and services. It is a measure of value, means of growth, means of movement and means of imbursement. It is described as a unique means for exchange.

What forms has it taken over the history of mankind?

Money is in the form of coins and notes in United States of America. The coins are pennies, nickels, dimes, quarter dollar, half dollar, and a dollar cent. The bank notes are available for one, two, five, ten, twenty, fifty and hundred dollars. Government stopped the production of the following notes of five-hundred, thousand, five thousand and ten thousand dollars in 1946. The printing and circulation of money is under the control of Federal Reserve System. Coins are craved by Mint of US Denver and Philadelphia, whereas paper money is produced by U.S. Bureau of Engraving and Printing in Washington, DC (Montiel, 193).

Money is printed on the steel plate called intaglio. Pennies are made of zinc, nickels are made from copper. Silver certificates were originated from 1878 and issued by the U.S. Treasury in denominations of 1, 5 and 10 dollars. The new bill Federal Reserve Bank of merit $ 2 could not replace the notes in $ 1 was released in November 1975 when 525 million of such notes were purchased by the Federal Reserve Bank pay 15 dollars for 1000 notes, or a total 7.875 million dollars except for payment of expenses of the Treasury to develop the sample preparation of printing plates and printing of banknotes (Montiel, 193).

What is fiat and commodity based money?

Commodity money is the money which value is determined from a commodity from which it is made. These are objects which possess their individual value as well as they represent money, for example, gold or silver. Fiat money represents metal coins. They represent a much higher value than their face value. It is fake money. It is printed on paper and without nay collateral security. Mostly it is secured by the government. It runs only due to government regulations and law. Today, even the US dollar is fiat money.

What is the origin of the expression, “Bad money drives out good?”

Gresham's Law is described as 'bad money drives out good' meaning the fault is known more prosperous than the obscure righteousness. Gresham's Law is named after its creator ...