Functions of money-
medium of exchange /flow of value--the more it flows out of a boy's pocket into mine,the more i value him.
measure of value/unit of account/unit of value- the richer,the more valuable.Yes,Sid,you are not as valuable as Mittal's son.I only like you more because Mittal's probably a vegetarian.
2.Standard of deferred payment-"I'm not rich now,but LATER ,I'll pay you back for looking as gorgeous as you do by becoming an investment banker and taking people's money and becoming rich." GOLDEN words.Money is the unit in terms of which deferred/future payments are slated.
Money serves as a store of value. It can be stored without loss in value.People can save some and use it in the future.SEE? If a MAN has MONEY he is VALUABLE.
BECAUSE MONEY IS A UNIT AND STORE OF VALUE ,NOT MEN!
Classification
Money can be classfied on the basis of relationship between the value of money[FACE value] and the value of money as a commodity.
1.Full bodied money:That money who's value as money is equivalent to its value as a commodity.
That is,face value=commodity value.So he looks hot,and is rich.RARE.Like That Bachelor guy onTV.
But Beware,you shouldn't carry him around too much because he's probably a playboy.Just the way you shouldn't carry around gold.
2.Representative full bodied money
[The Sid Mallya type]Translation:he's not the best looking one around ,but filthy rich
This type of money has no value as a commodity,but it represents an amount of money with a commodity value.It is useful to carry from one place to another unlike full bodied money,because the girls won't get so jealous if I'm with Sid.With Enrique,there may be a problem.
3.Credit money -This refers to money whose value as money [face value] is greater than the commodity value with which it is made.He may not be rich ,but at FACE value? Killerrr!!!A guy who looks like Bradley Cooper or Ben Affleck has face value PEOPLE!
Face value>commodity value
Accordng to Keynes,people desire to hold money for three reasons:
1.Transaction motive:to carry out routine transactions,that is SHOPPING.
2.Precautionary motive:to fulfill unexpected requirements.like having to go SHOPPING for a pair of Manolos I had NO idea I'd need so badly that I'd die if I was denied them.
3.Speculative motive:It relates to demand for money with a view to make monetary gains.Make money out of money.That is,I'M GOING TO MARRY YOU BECAUSE YOU'RE RICH,AND DIVORCE YOU SO THAT I GET RICHER THANKS TO THE ALIMONY WHICH I'LL INVEST IN STOCKS AND GET RIIIICCHH AND THEN MARRY SOMEONE EVEN RICHER.And I'll do this repeatedly,with more dumbasses like you BECAUSE I WANNA BE A BILLIONAIRE BABY!!!!
Inflationary GAP:
If aggregate demand is more than full employment level then the situation of excess demand exists.Excess demand gives rise to inflationary gap which causes rise in price level or inflation.
This means,we all want hot rich strong guys,but even though there are more than enough men,there aren't as many desirable men as we'd like,and hence there is a gap between demand and supply even though ,number-wise,there are more men than women,but not the kind that we want.So ,resources are fully employed,but production is not enough to meet our demands!
Causes of excess demand/inflation
1.Rise in "household" consumption due increase in Marginal Propensity to Consume,that is,the good one's get married off early because of their parents' desire to consume the dowry increases with increase prices.
2.Rise in private investment.Hot Muslim guys marry their cousins.They don't even GO public.Everything is settled within the privacy of the family only! Na-insafi!
3.Rise in government expenditure.Ok...iska koi correlation nai soojh raha.lol
4.Rise in deficit financing.Can't correlate this with anything either!:p
5.Growth of "black" money in the economy.Seriously,I don't mean to be racist[you're talking to the girl who's secretly crushing on Usher and that hot detective from Criminal Minds],but most Indian girls are like that.
6.Surplus in balance of payment.[Exports and Imports].Sab hot ladke abroad jaake NRIs banenge then Bachega KYA??
God help us ladies.Cuz,you know,not matter how much money you have,or how many men,they're never enough. lol :P
This is all I've studied[no,really!].and I think I've lost my Income Determination notes.Just the way guys sometimes lose their slut detection notes.ON purpose,in most cases.
If anyone finds either,lemme know!
