1. Coins: coins are made up of precious metals in different shapes and sizes. It bears a country’s official stamp as a legal tender. Coins can be standard coins or token coins. A standard coin has the same face value as the content while a token coin has the same face value as the metal content of the coin. This will discourage it from being used for other purposes.
2. Banknotes: These are made of paper-and are issued by central bank with the amount written on it. Paper money that is not backed up by gold or any other valuable metal is known as “judiciaryThe judicial branch of government refers to a country’s court system. Judiciaries are responsible for interpreting and applying a country’s laws in particular cases, and can also be invested with the... More Issue” if all the paper money in a country is backed up by gold, the country is said to be a “gold standard”.
3. Quasi Money: These are near money but not legal tender. It can be converted into money. Examples of quasi-money are; money orders, postal orders, cheques, bills of exchange, promissory notes, etc.
4. Bank deposits: This includes money deposited into the commercial bank which can be withdrawn with the use of cheques. Though it can be used for transactions, it is not legal tender. It is very important in making payments where large sums of money are involved.
Evaluation Questions
- Define money
- Explain the history of money
- List the functions of money
- Explain the qualities of money
- Describe the various forms of money
Responses