Contemporary Business Analysis Essay Example | Topics and Well Written Essays - 2000 words

The Concept of Money and Its Creation - Essay ExampleThis paper illustrates that for many centuries since the invention of money as an alternative medium of exchange from the old system that used barter trade, the medium has revolutionalized monetary systems. Without the invention of money, one would wonder whether we would have the current financial institutions. The use of money eased the process of making payment and purchasing of items. The process of creating money is often a misunderstood phenomenon. Although many studies show that thither are two main institutions tasked with the process of money creation, the process voluminous in creating money without the manual paper consideration is elusive. The two main institutions involved in the creation of money are the financial banks and the government.It is estimated that about 97% of the money created originates from the banks while only 3% comes from the governments. Using the United States as a case study in describing and as sessing the effects and effectiveness of qualitative easing would provide a plat ricochet on how to stabilize economic growth. The narrow form of money is the most common medium of exchange. It is the form of money in circulation within any economy. It consists of coins and notes as well as sight deposit. The site deposits belong to to accounts whose owners can make withdrawals without attracting penalties. The narrow form of money is corroborative indicators for the spending regimes. In fact, the form of money used in carrying out most of the daily transactions of services and goods are the narrow form of money. Therefore, narrow money is the main form of exchange involving the monetary value. The zero maturity money is the core of coins and notes on hold by the private sectors (the non-bakers). For instance, employers pay their employees either by cash or cheque. Besides, these companies used the same form of money to pay and blow up their expenditures. Unlike the broad form of money, the narrow form of money gives a clear outlook on the assets employed as the medium of exchange.