How is money used in everyday life. Explain with examples.

Q. How is money used in everyday life. Explain with examples.

Ans.

The following are the uses or functions of money.
1. Medium of exchange
Money acts as a medium of exchange as it facilitates exchange through a common medium, i.e. currency. In other words, money helps in the buying and selling of goods. For example, a person can sell his goods to another for money and that person can use money to purchase goods of his choice. Money solves the problem of double coincidence of wants.
2. Unit of value
The values of goods can be measured in terms of money. It is a common medium through which we can calculate the value of each and every good. The value of a good in terms of money is called the price. In barter system the lack of a common denominator for measuring values of goods was a major drawback.

1. Money, the primary means of transaction, is of great importance in our everyday life. It is the most accepted mode of carrying out almost every transaction and exchange.

2. Money is used in obtaining the basic necessities of life including food, clothing, and shelter. It is also essential in getting access to services such as education, transportation. healthcare services, sanitation and other means of entertainment.

3. Money forms the basis of almost every transaction and therefore is the basis of business and trade activities. It is thus, the most significant tool that helps in the smooth functioning and growth of the economy.

In modern times, money is used as a medium of exchange because it has been authorized by the government as a currency.

In everyday lives we use money:

(i) To buy goods and services like in market money can be used to buy clothes, vegetables, etc.

(ii) To deposits in banks so that money can be saved and used for future use. For example—if a labourer deposits his monthly salary in his bank account, then, he can use it in instalments during the entire month.

(iii) As a store value. For instance, we cannot store perishable goods like milk, grain, etc., to exchange goods in future. However, we can buy precious metals like gold and save it for future use.

Answer:

Money, is the most accepted medium of exchange for carrying out almost all the transactions such as buying and selling of any goods and services.

It is used in "obtaining the basic necessities" such as "food, clothing, and shelter". It is also important in "obtaining services" such as "education, transportation. healthcare services, sanitation and entertainment". Hence, money forms the basis of economy and has huge significance in the smooth functioning and growth of the economy.

Money is used in everyday’s life in many ways, the entire human race depends entirely on money. We buy food, medicines, transportation everything with money.

Even if we are hospitalized with some illness we need to pay the bills with money in our hand. Our communication aids such as computers, mobile phones, etc., have bills generated which has to be settled with money.

Basic amenities such as electricity, food and shelter are bought using money.

Money acts as a medium of exchange as it facilitates exchange through a common medium, i.e. currency. In other words, money helps in the buying and selling of goods. For example, a person can sell his goods to another for money and that person can use money to purchase goods of his choice.

In everyday life, money is used in following ways: It is used as a medium of exchange and facilitates the buying and selling of goods like car, house, food, clothes etc. It is used as deposits with the banks or to keep it at home like fixed deposits, bonds etc. It is used for borrowing and lending like loan.

MONEY'S ROLE IN SOCIETY

Hyehyun Park

Modern Society

Often times, people say that they can live without money. They define money as just one of the tools that enhances peoples living environment. However, in real life money is a very important matter in peoples lives. Although the people in history might have lived through the exchange of goods and not relying to the value of money itself, modern society today could not function without money. Money plays a huge role in the society in variety of ways such as in business, at peoples job, and even in education. Money helps people achieve a better quality of education, larger chance of business success, and higher work output.

Higher quality of education

People value education highly in their lives and a quality education is dependent on the amount of money spent on this type of investment. Every single person in this world has to invest their money on education for them to gain learning. These learning would not just count the education they receive in school but other extracurricular activities such as learning how to play the piano, art, and even dancing. Most of the time, for people to have talents such as playing the piano, they have to devote their money to a teacher who has a high piano professional degree. Similarly at school, people would also like to be taught by a teacher with higher degree of profession in their field. It is believed that teachers who have been highly educated can provide better teaching to their students. The high quality of education brings oneself a higher possibility to succeed in the future society. This is because when people are exposed to high quality of learning they tend to be taught higher educated materials from a well-educated teacher. A higher quality of education also means that one would study in a well structured environment with other educated friends. They would also have a better chance of meeting people with more authority which would contribute to their networking in future career.

In Business World

Money also plays a significant role both in our society and in worldwide business. In the business world, most interactions that people have involve a huge amount of money. One common example of a worldwide business is investment. In the field of investment, people put a lot of their money into a particular market and as the market gets bigger and builds a higher reputation, the worth of money invested grows larger. In this investment, people earn a lot of money but often times they lose all of their fortune. The money they gain from the investment is usually used to build up ones new business or even to invest in different markets. The importance of these businesses in our world is that it helps our economy to function well. These businesses help factories operate properly which in turn allows supply to meet the demands of the consumers. In fact, it is the factories and markets who provides the people with the goods that they need. The society will lose its order if the different types of business happening around the world stops. If one business stops other business will get affected and ultimately the supply would not meet the demands of people.

Quality of living

Even in a smaller scale in business, wages and salaries are important matters when it comes to human. The wages are the proof of peoples effort and devotion to the work they do. The wages vary from one to another depending on the kind of job people do and the position they occupy in the company. People use the earnings they get from their work in many ways. They buy the necessary things that they need to sustain their living such as home, food, and car. As mentioned in the earlier paragraph, these wages are also used to attain high quality of education. There are huge differences between people who work and earn wages and people who do not. People who can earn their livings mostly live a life filled with what they want to have. They eat nutritious food which helps sustain body health and use cars to transport them to wherever they want to go. On the other hand, people who do not have a job and earn nothing often have hard times sustaining their life. They have nothing to support their health. They also do not have a permanent shelter where they could rest on. These people could not live properly because they could not afford any of it. These illustrate a contrasting example of people who earn wages and who do not. Wages are a hugely significant matter for one to maintain certain quality of life. Therefore, the importance of money within humans life could not be doubted.

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