Tuesday, 10 November 2009

Analitycal Exposition (1)

With money we can buy the things that we need every day. And there are many things that money can do.

Money is first of all a means of exchange. If you want to exchange some books that you do not need for a shirt, you may try to find someone who needs your books and who has the shirt that you want. But it is often hard to organize an exchange. It is easier to sell the books and then buy the shirt that you like.

Money is also a means of measuring the value of other things. It is easier to say how many rupiah a cow costs than to say that it has the same value as five goats.
We can also store value with money. It foes not spoil as fish or fruit or vegetables do when they are sold. The cost of things, of course, may change as time goes on and money that you have today may be less in the future. If it loses a lot of its value, money woll be a bad means of storing value. Then it will spoil farmer’s production spoil.

Finally, money is a means for making payments. You may buy a bicycle now and pay for it in five months, and make a payment of one-fifth on the cost every month. This is better than buying one-fifth of a bicycle at a time and not riding it until you have bought all parts. Many shopkeepers are happy to do this for you if your credit is good. That is, if you always make your payment on time.

Read More..