Money and Banking Principles, is defined as something that is commonly accepted as payment. For example, cash or a bank account. 안전한 카지노사이트
A double coincidence of wants is required to facilitate the trading of commodities and services, i.e.
A transaction would only occur if you desired what I had and you had what I wanted, as in the barter system.
Banks are financial institutions that receive deposits and lend out money.
Create money in order to facilitate economic transactions. Money and banking are governed by five fundamental concepts.
Five Money and Banking Principles
Time
Time has value, and inflation reduces value. It has an impact on decisions about immediate or future consumption, investment, and compound interest profits.
Lenders will demand compensation for leaving with their money and gradually regaining it.
Borrowers are willing to accept this reward in exchange for receiving the essential dollars today.
Risk
Risk (possible losses) cannot be avoided and must be compensated for. Higher risk possibilities typically have higher interest rates (i.e., higher reward). 카지노사이트
People are willing to pay to avoid risk, and those who take certain risks will be compensated.
Information
Decisions are based on information. When there is asymmetric information, problems can occur.
Asymmetric information happens when one party in a transaction has more knowledge than the other, making decision making inefficient.
Markets distribute resources
Because primary ingredients of production are rare resources with infinite desires, the market allocates these scarce resources by determining a price consumers are willing and able to pay.
(Match borrowers with lenders.) A market determines the price at which scarce resources are rationed to those willing and able to pay.
Similarly, markets in the financial industry will determine which investments are funded.
Stability
Economic or market stability enhances economic welfare. Central banks seek to keep markets and the financial system stable, which benefits everyone. 카지노 블로그