'A country that sells more goods and services in overseas markets than it buys from them has a trade surplus. National Savings Certificates are not included in M4 either.īalance of payments, which comprises trade balance (net inflow/outflow of money) and flow of capital, also affects the value of a country's currency. Includes M3 money supply along with other post office deposits as well.

It is used as a common measure of money supply. It excludes money in post office fixed deposits and National Savings Certificates.Ĭomprises M2 money supply plus fixed deposits (or time deposits) held with banks. Includes money held in post office savings accounts along with M1. The value of a country's currency is linked with its economic conditions and policies.Ĭomprises all the currency in the economy as well as the money in savings and current accounts held with banks (demand deposits). One rupee in 1947 is not the same as one rupee today, both in terms of appearance and purchasing power. Money is not an organic creature but its value keeps changing with the society and its economic conditions. They exist as entries in ledgers of financial intermediaries and can be used to make payments for goods and services. Instruments such as cheques, demand drafts and banker's drafts are commercial bank money. In contrast, fiat money's value is imposed by the government, which makes refusal of payments made in the notified legal tender, in the form of currency notes and coins, illegal. Representative money is token coins and notes that can be exchanged for a fixed amount of precious metals or other commodities. The use of commodity money is similar to barter, except that the commodity used is widely accepted and can be easily handled. Gold coins, cocoa beans, cattle or anything that has a value of its own and is used as a medium of exchange is commodity money. It can be of different types-commodity money, representative money, fiat money and commercial bank money. Money is the value assigned to a commodity, a piece of paper, a coin or electronic data (think online banking and credit cards). Shops accept currency notes and coins, but they also accept credit cards. With the exception of someone living in a cave on an undiscovered island, everyone uses money.

Download s $1 to inr