1.) Money
In terms of economics, “money” is something that society has accepted as a medium of exchange and has a value relatively constant.
Why we study about money ?
Because D Ms of money has variables affecting of economy as GNP, i, I , P , and employment.
2.) The Function of Money
Money serves important in economy four types as follows :
(1) Medium of Exchange.
- Facilities the exchange of goods and services, between individuals in society to be possible fluently.
- Enables the division of labor to do and specialization for getting a convenience and growth in trade even more.
(2) Standard of Value and Units of Account.
- Money is a tool of measured goods and other services ,however; by comparing the value of those goods and services as currency. Such as pork cost 35 baht per Kg and egg cost 2 baht per egg. Because in accounting can total value of other goods as a unit.
(3) Standard of Deferred Payments.
- Together can pay its debt with money that facilities for both debtors and creditors.
(4) Store of Value.
- Money is one form of assets that people are popular retained the property because money is assets that are most liquid can buy goods and services of all kinds needs immediately. But, saving in the form of money , has one disadvantage is not has benefit to the owner as opposed stocks and bonds will provides benefit.
3.) Value of Money.
The value of money has two characteristics:
(1) External Value is the price of one currency when represent the price of other currencies. So, the value was determined by external foreign currency exchange rates.
(2) Internal Value is purchasing power of goods and services for each unit of money.
4.) Characteristics of Good Money.
(1) There are acceptable from everyone in society.
(2) There are convenience bring into other place.
(3) There are scarcity.
(4) There are durability.
(5) There are stability of value.
(6) There are homogeneity.
(7) There are unique memorable.
(8) There are divided into sub-units.
5.) Type of Money
Currently, there are many types of money can divided as follows :
(1) Coin issued by Treasury Department, Ministry of Finance made of metal.
(2) Paper Money is money printed by central banks. Use paid the debt according to the law.
(3) Bank Money means current deposit. Bank of Thailand called sight deposit.
1.) Quantity of Current Money
- Money Supply follow the meaning is narrow (M1) consist of coin , paper money and current deposit in public hands.
- Money Supply follow the meaning is wide (M2) consist of
M1 + fixed deposit + savings bank deposit = M2
2.) Money Substitute and Near Money
Money Substitute is an Instrument to acts temporarily as a medium of exchange, but in the final settlement still needs to spend money away , such as all credit cards or American Expires card that we do not count in M1 and M2.
Near Money means assets can be change to money quickly that its values does not change much such as fixed deposit , savings bank money , government bonds , and bonds.
3.) Money and Near Money
We can see the difference by considering the follows :
Monetary Theory
A theory describes the relationship between money supply with cost of goods and services.
- Traditional Monetary Theory that school of classic. (David Ricardo John Stuart Mill)
This theory often focus on the role of money as a medium of exchange. People want to hold it to spend money on goods and services only. See on the question following :
- Monetary Theory in The Question of Exchange. (Irving Fisher)
Has bring the traditional monetary theory to modified the increasing velocity of circulation and trading volume of exchange.
This equation provides everything fixed , besides M , V , and Q are change.
- The Cash Balance Equation of Exchange.
A theory has been updated by economist , school of Cambridge. The equation that…
This theory emphasis on demand, or the desire to hold people's money. The old theory that focuses on the supply. This hold money theory conclusion, general price level changes on the demand and supply of money changes. So, if the money is stable, then it must be controlled to demand and supply of money constant , or changes in proportion to each other.
Kenesian Monetary Theory
Keynes has the opinion that consumers have a need to hold funds three main reasons. There are …
(1) In order to spending on a daily basis.
§ Reserve money with a certain amount for purchase goods and services.
(1) To reserve use in case of emergency.
§ Uncertainty of future events must be reserve money to use in the case of expenditure that is not expected before. Such as illness , the car is dead , and get an accident.
Reserve for use in an emergency , as above will vary based on income as well and a few changes to interest rates.
(2) Find the profit.
§ Reserve this section to purchasing property in low price and take on sale when property has high price.
Equation the desire to hold money of Keynes.
Normal desire to hold money to hedge changes in the opposite interest rate , but when the minimum level of interest. The desire to hold money to speculate that it is perfectly elastic holders to hold money to hedge funds as long as interest rates remained low.
Central Bank
Bank Of Thailand , established first since December 10, 1942 by Her Royal Highness Princess Wiwattanachai who first governor of the Bank.
Function of the central bank.
1. Issuer bank card or paper money.
Through assets as reserves , and supervision of credit notes , and a fit with the needs of all businesses.
2. International Reserves Manley.
The key to stability in the exchange of foreign currency are more or less depending on the economy and balance of payments.
3. The government's banker.
Serves as a commercial bank to its customers , such as deposit , payment of government organization , the government or state loans , treasury bill trading , and government bond.
1. Representative Government Finance.
Such as control foreign exchange and dealing with the public debt.
2. The bank's commercial banks.
Such as deposit reserve banks , Manage Interbank Clearing , and the commercial bank loans.
3. Controlled financial institutions to operate legally.
Legal business with the bank by the security check establish control banks and abandonment operations.
4. Control the domestic money supply by monetary policy.
The essential functions of the central bank to maintain the proper amount.
5. Support economic development.
The establishment of public and private financial institutions to loan money to invest in development.
Central Banks use monetary policy to modified , to create financial stability of Thailand by …
(1) Control the Quantitative.
A. Open Market operatic
B. Rediscount Rate or Bank Rate
C. Changer Segal Reserve.
(1) Specific credit control.
A. Credit Control for speculation or trading.
B. Controls for consumer credit.
C. Credit control for the construction or purchase of building.
D. Credit Control asked how unceremoniously.
(2) Direct control.
A. Central bank will limit the high bank will lend or invest at all.
B. Central bank requires commercial banks to reduce loans and increase the system by the central bank policy.
Commercial Bank
function of the Commercial Bank as follows :
1. Deposit
(1) Current account.
(2) Saving deposits.
(3) Fixed deposits.
2. Loan
(1) Loan or overdraft.
(2) Loans.
3. The Discounting of Commercial Note.
4. Transfer Money.
5. Charged Instrument.
6. Acceptances and Guarantees.
7. Investment in the Securities.
8. The International Business.
9. The Business in the Economy.
10. Other Business a required by laws.
Create a deposit with the banking system.
Create a deposit which is the economic impact of the most common. There are affects the amount of money in the economy. Bank deposits has created three cases.
(1) To create a single bank deposit.
Can create deposit a maximum excess payment provision. The bank is located deposit made known the second deposit.
(2) To create a monopoly bank deposits.
Create a deposit as a way of bank deposits , but the only difference that no loss of cash to other banks. They were able to deposit more.
(3) Create a deposit with the banking system.
Because each country has several banking sources. If the banks are all together referred to as "the banking system".
Deposits by banks to create the entire system. Occurs when a customer deposits cash deposits, called “Primary Deposit”. Bank does not need to keep cash reserves to provide payment to the depositors come withdraw fully at 100%. This is the normal individual depositors do not come withdraw funds at deposited all same time. The Bank has the opportunity to deposit part to seek benefits from the regular loans , or the overdraft and invest in various securities to the banks will have to stock up much depends.
1. Cash reserve ratio by law.
2. Cash in the bank to keep paying customers.
Damage deposit By collect from loan.
General duties of the bank into three large reasons are
1. Responsible for the deposit.
A. Current account.
B. Saving deposits.
C. Fixed deposits.
2. Responsible for a deposit or loan.
A. The customer can withdraw over money in current account deposits.
B. A debtor to contract loans.
C. Purchase money by discount.
3. Other services.
A. There is an available in the representation of clients.
B. To provides support for international payments.
C. To provides sale traveler's checks.
Duties of the executive or director.
The ability to guide the decision on operating, monitoring, control work carried out so well. Including effective leadership in the art or process of making a person willing to work to accomplish goals and objectives of the organization setting.
Meaning
The director refers to the process managed to make theorganization apply a positive attitude. The management must have skills to know a human as well.
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