Money and Credit — Flashcards

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Money is anything that is widely accepted as a means of payment for goods and services. According to Robertson, 'Money is anything which is widely accepted in payment for goods or in discharge of othe…

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A primitive economic system where goods are exchanged directly for other goods without using money. For example, if person 'A' has a cow and wants sheep, they must find someone who has sheep and also …

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Evolution stages: 1) Barter System - direct exchange of goods, 2) Commodity Money - standard commodities like cattle, sheep, teeth used as money, 3) Metallic Money - gold, silver, bronze coins with pr…

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1) PRIMARY FUNCTIONS: a) Medium of exchange - used to buy goods/services, b) Measure of value - all values expressed in money terms. 2) SECONDARY FUNCTIONS: a) Standard of deferred payments - helps fu…

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Legal tender is money that must be accepted by law for payment of debts and transactions in a country. No individual can refuse legal tender in transactions. Examples: Rupee in India, Dollar in USA, P…

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CREDIT CARD: Enables buying goods/services on credit at specified suppliers. Payment made from credit account, money borrowed from bank and repaid later with interest. DEBIT CARD: Works similarly but …

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Credit is an agreement where lender supplies borrower with money, goods, or services in return for promise of future payment. Two types in India: 1) INFORMAL CREDIT SECTOR - Indigenous bankers called …

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The farmer should approach a BANK (formal credit sector) because: 1) Banks charge reasonable interest rates while moneylenders charge exorbitant rates, 2) Banks are regulated by RBI ensuring fair prac…