Money resources or services to equal each other

Money has been around for at least 3,000 years in some kind of form. However, with the changes that have occurred, we might be headed towards becoming a cashless world. “The history of money involves the development of means of carrying out transactions involving a medium of exchange” (“History of money”, n.d.). Money has been known to be any object of value accepted as payment for goods and services. The use of money also allows for repayment of debts within a market. Before money was introduced, there was a system called bartering. Bartering has been used throughout many centuries and can still be used to this day; however, bartering has its limitations which allowed for the creation of many different forms of monetary systems throughout the years. Even though money has taken numerous forms, it has always kept a connection with the technological advancements that have occurred in the economy. With the help of monetary systems, the world has evolved and allowed for the business world to expand and become a lot faster. It has also allowed the bank to conduct and monitor the economy using monetary policy. Although with the constant changes in the monetary system, many people have questioned the importance of money and have wondered if one day the world will become cashless. By definition money is known as a medium of exchange, a store of value or a unit of account (Jacobs & Šlaus, 2012). Throughout time, money has “undergone various changes in form, content and the source of value it seeks to represent” (Jacobs & Šlaus, 2012). It has gone from barter to modern coinage to paper currency and has now reached electronic money. When bartering first begun, it was known as an “exchange of resources or services for mutual advantage” (The History of Currency,”(n.d.). It was a relationship between two people who wanted something which the other had. The way bartering worked, was two people had to both agree on the value of their resources or services to equal each other and agree on the direct trade. If there was no mutual agreement between resources and services, then the trade would have to be altered until there was an agreement for the deal to proceed. Although bartering worked for many years and can still be used to this day, it does have its limitations. “With rise in economic activities, the exchange through barter became more difficult and complicated” (Chand,n.d.). However with the constant advancement of technology, improvements were made which brought the creation of the monetary system. One achievement of monetary system is the increasing rate that business was being done (Monetary Policy, n.d.). “The evolution from barter exchange to monetary exchange has resulted in enormous social progress” (Jacobs & Šlaus, 2012). When modern coinage was created, it increased the internal and external trade. The first coins that were developed were lumps of silver and soon after became bronze and gold. These coins had more value and were accepted as a form of payment instead of exchanging for a good or service. This created an increase in the speed of business being done and slowly eliminating the use of bartering. It allowed people to purchase goods and services without the hassle of finding an acceptable trade. It created efficiency; “the advantages of money over barter, which requires the double coincidence between buyer and seller” (Jacobs & Šlaus, 2012).  After modern coinage was created as a form of money, then came the paper currency. The first paper currency was known as paper banknotes. Banknotes were used by the bank to keep notes for the depositors and borrowers to carry around instead of having coins (Beattie, 2015). Banknotes are similar to our currency that we use today and could be used to purchase many goods and services. These banknotes could be exchanged at the bank for their face value in silver and gold coins at any time. Banknotes made it easier for trade and eliminated the constant need for people to carry coins around with them every day.As time goes on, the monetary system is still continuously changing and is always improving. Due to the technological advances, the money system has continued to progress and has now even reached a digital-era. This is why money has been a great advantage to the world of business. It has increased the internal and external trade and is leading to a more advanced economy. Although bartering is still used by some individuals, monetary currency systems have been encouraged by the government to support and encourage their economies to trade within regions.  “Money also forms the foundation to a capitalist economic system, as capital would become nearly impossible to exchange or value without money.” (McQuade, 2017). With the progress of the numerous changes, the economy is able to sell and buy goods with ease. It allows for quick payments and business transaction rather than altering a trade until one is met and considered equal. It allows for a less time consuming method of payment. Since barter is a system of trading one good or service for another, monetary system allows for a less energy consuming process. This is why it has been a great resource and has made such a great impact in our business world of today. In 2012, cash was only accounted for 40% of payments and has been decreasing ever since (Sorrel, 2016). As cash payments continue to decrease, we are moving closer and closer towards a world without cash. This is a world where online transactions and credit cards are the main source of payment. Payments can be done instantly by just a click of a button and without having to withdraw money from the bank. This results in a decreasing amount of payments being done by cash: it allows people to have their money deposited directly into their bank accounts. The more sophisticated the society is becoming, the less traditional money has increased. In the article “What Happens When We Become A Cashless society?”, Charlie Sorrel mentions that “In France it is now illegal to use cash for anything more than 1,000 euros (around $1,080)” (Sorrel, 2016). Although this statement is referring to France, it demonstrates how the world is adapting to the new demands of the technological advancements. This allows for an easier way of tracking transactions if ever needed, it eliminates the use of traditional cash and pushes towards a more digital method of payment. There are many advantages to a world where cash is no longer needed: however, like anything that comes with advantages there is usually some kind of disadvantage. One of the advantages would be the elimination of the black markets which would allow for an easier monetary policy (Sorrel, 2016). As for many economists, less cash flow means negative interest rates, negative interest rates lead to lenders paying borrowers interest (Heller, 2016). As for disadvantages, there would be the reality of every transaction being monitored, taking away the autonomy that money gives. “A full shift to electronic currency introduces in tracking and traceability which would violate our basic civil” (Shah, 2014). Although this is a disadvantage to the people, this would be an advantage to the government as there would be less chance of hiding from being taxed. This would allow them to track any records that cash payments wouldn’t be able to provide. Also, it would allow banks to pay no interest considering they do not have any interest on digital currency balances. This would allow for banks to have an interest free loan from any customers. With digital currency balances, banks are also able to make money off credit card transactions, account fees and maintenance. With the ongoing evolution to a world without money, the main concern that is becoming an issue is that the cost of production of paper money is becoming higher due to security requirements.  Although monetary currency has been a successful method of payment over many centuries, this could become an issue which is pushing towards a digital solution. In the article “The End of Paper Money” Vikas Shah mentions, “fundamentally money exists when the community using it agrees that it is an acceptable, secure and sustainable store of value” (Shah, 2014). If there is less and less cash transactions being done, then online transactions will be used as the main or better yet, the only source of payment. France is slowly adjusting to the digital-era as they start to ban payments over a certain amount. With time, since there is a constant demand for improvements in the development of the economy, this might result in a world where no cash is needed. In the Article “Time for a New Theory of Money,” Ellen Brown states “they were gambling that their customers would not all come for their gold at the same time” (Brown, 2010). Although the banks would keep money from the depositors and give banknotes, it has always been a question if the bank actually had all the money they were accounted for. Ellen Brown also mentions that “if they don’t have enough deposits, they have to borrow from the money market or other banks” (Brown, 2010). This explains the process of the banks, if less money is being deposited then there is less money for the bank to loan out which makes the banks borrow from the money market or other banks. As society is becoming more sophisticated, there has been less cash being distributed and more digital money. This brings up the concern of if there is actually enough traditional money to give back to depositors or is it just a digital number displayed in our accounts as there is only a minimum amount kept on reserve at the bank. As described by the Bank of Canada, their role is “to conduct monetary policy in a way that promotes the economic and financial well-being of Canadians. The Bank does this by regulating money and credit in the economy so as to preserve the value (purchasing power) of the nation’s currency” (Monetary Policy – Backgrounders, 2012). That being said, the objective of monetary policy is to keep inflation low, stable and predictable. “Low and stable inflation benefits Canadians in important ways. It creates an environment favourable to steady, healthy growth in output, employment and incomes over time”(Monetary Policy – Backgrounders, 2012). Keeping inflation low allows Canadians to make spending and investment choices with more confidence. This confidence encourages more long-term investments in Canada’s economy which contributes to creations of jobs as well as greater productivity. With the creation of jobs and greater productivity brings improvements to a better standard of living. Canada’s monetary policy works using the two following key components; the inflation-control target and the flexible exchange rate. The inflation-control target was adopted by the Bank and Government of Canada in 1991 and has been renewed several times since (Monetary Policy – Backgrounders, 2012). As for the flexible exchange rate it “allows the Bank to pursue an independent monetary policy that is best suited to Canada’s economic circumstances and is focused on achieving the inflation target” (Monetary Policy – Backgrounders, 2012). With the use of these components, the Bank is able to demonstrate to Canadians the monetary policy actions: however monetary policy actions do take time to go through the economy; it can take between six and eight quarters to have full effect on inflation (Monetary Policy – Backgrounders, 2012). Seeing as it can take some time, monetary policy is always planned looking forward. The bank’s base the inflation on where it would be in the future and not based on today to better assist the Canadian economy.To conclude, money has seen a variety of changes throughout time. Due to the advancement in the world of technology, money has evolved and has adapted to these changes in the economy. Although barter can still be used today, the world has adapted and created the use of monetary systems. As previously mentioned, the more sophisticated the society has become, the less traditional money has increased. This is directing the world to a more digital-era where everything can be paid at a distance. With the use of digital money, it has made it possible to make payment transactions over the internet. Demonstrating that less and less cash is being used as payments considering it could be done by just one click of a button. There is no need to carry around cash since there is the use of credit cards and online payments. This has allowed business transactions to become a lot faster and to perform with ease: however, digital money comes with trackable transactions that traditional money leaves behind. It removes the autonomy that some would get from money but then again it would also remove the black market and allow for an easier monetary policy. With the use of monetary policy, the Bank of Canada is able to help monitor the economy by keeping inflation low, stable and predictable. This allows Canadians to make investments with confidence and create a better standard of living. Although money has been around for many years, it is slowly on its way out as the demand for a more technologically advanced economy increases.

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