Economics: Money and Banking

Subject: Economics
Pages: 1
Words: 253
Reading time:
< 1 min

Money is something which can get us some product or service. It is a medium of exchange that works as a liquid asset and works as a causative factor in any economy. During the early ages when ‘money’ as such was not in wider use, people used to interact in barter trade, which implied trading in a set of goods or services in lieu of another set of goods or services. Gradually, as the metal age came up and human beings started living as a civilised community, money started being offered for the product or services.

Money exists in different currencies and forms all around the globe. It can be in the form of gold, coin or paper note, which can be legally exchanged for something equivalent. Therefore, it becomes an asset requiring safer custody, from where we can make the best use of it. To this end, the banking industry came forward. Banking functions only because we need money to make a house, to buy a meal, to travel etc. The banking system works by supplying the money from one end to another. While the depositor gets some interest on the deposited amount, the borrower has to pay some interest to the bank for making use of the money in the form of loans. Nowadays’ the banking industry has come out with many other financial services like a credit cards, online banking, wealth management, brokerage etc. It is worthwhile to mention that all such transactions require all-important money.