To Produce Goods,
we need to ask the following questions:
- What to produce? Different goods
- How, where and by whom? Distribution chain/ different sectors in the economy
- For whom? Consumers
Economics is concerned with what and how to produce goods and services
and how to distribute these products.The logical sequence is: production creates income (earned in the
production process by the various factors of production) and this income is
then spent to purchase products.
The ultimate aim is to use or consume the products to satisfy human needs
and wants. (Total number of products and services produced in a country – GDP)
Alternative titles: exchange; exchange economy
ReplyDeleteBarter, the direct exchange of goods or services—without an intervening medium of exchange or money—either according to established rates of exchange or by bargaining. It is considered the oldest form of commerce. Barter is common among traditional societies, particularly in those communities with some developed form of market. Goods may be bartered within a group as well as between groups, although gift exchange probably accounts for most intragroup trade, particularly in small and relatively simple societies. Where barter and gift exchange coexist, the simple barter of ordinary household items or food is distinguished from ceremonial exchange (such as a potlatch), which serves purposes other than purely economic ones.
1.1.2
ReplyDeleteE-Money
Simply put, electronic money or e-money is the electronic alternative to cash. It is monetary value that is stored electronically on receipt of funds, and which is used for making payment transactions. E-Money can be held on cards, devices, or on a server. Examples include pre-paid cards, electronic purses, such as M-PESA in Kenya, or web-based services, such as PayPal. As such, e-money can serve an umbrella term for a number of more specific electronic value products and services.
The European Union (EU) has been involved in defining terms related to e-money since 2000, which is much longer than many other countries or regions. The following definitions are included in the most recent proposed directive from the EU.
Electronic Money Institution. A legal person that has been granted authorization to issue electronic money.
Hybrid Issuers. Service providers who issue e-money as an accessory activity to their core business, ie mobile phone companies, public transport companies, etc.
Mobile Financial Services
Mobile Financial Services or MFS is another broad term that refers to a range of financial services that can be offered across the mobile phone. Three of the leading forms of MFS are mobile money transfer, mobile payments, and mobile banking.
Mobile Money Transfer (MMT). Services whereby customers use their mobile device to send and receive monetary value - or more simply put, to transfer money electronically from one person to another using a mobile phone. Both domestic transfers as well as international, or cross-border, remittances are money transfer services.
Mobile Payments. While MMT addresses person-to-person money transfers, mobile payments refer to person-to-business payments that are made with a mobile phone. Mobile proximity payments involve a mobile phone being used to make payments at a point-of-sale (POS) terminal. In these cases, the mobile phone may communicate with the POS through contactless technologies, such as Near Field Communication (NCR). Mobile remote paymentsinvolve using the phone as a mechanism to purchase mobile-related services, such as ring tones, or as an alternate payment channel for goods sold online. Mobile bill payments tend to require interconnection with the bank account of the receiving business, and hence are considered part of mobile banking.
Mobile Banking. The connection between a mobile phone and a personnel or business bank account. Mobile banking allows customers to use their mobile phone as another channel for their banking services, such as deposits, withdrawals, account transfer, bill payment, and balance inquiry. Most mobile banking applications are additive in that they provide a new delivery channel to existing bank customers. Transformative models integrate unbanked populations into the formal financial sector.
Other Terms
Other terms that are often used in association with, or interchangeably with, e-money, mobile financial services include:
Electronic Wallet (eWallet). Refers to the cash value that is stored on a card, phone, or other electronic device. Pre-paid cards are one form of electronic wallet. Electronic wallets can represent a fixed value. In this case, once the value has been spent, the card can no longer be used. Or wallets can be reloaded – to be used again and again. The term wallet is used because the card or phone is considered a substitute for the cash normally carried in a person’s wallet.
1.1.3
ReplyDeleteMoney is any acceptable commodity that serves as a medium of exchange and a store of value. Today we use notes and coins as money. However, in the past barter was the medium of exchange. Barter involves exchanging or swapping goods and services for other goods and services. For example a farmer who grows potatoes needs cloth to make clothes. So he exchanges a sack of potatoes for a roll of cloth in the village market with a cloth maker.
FUNCTIONS OF MONEY
Money has four main functions:
It provides a standard of value
It is a medium of exchange
It is a means of buying on credit
It is a store of value
CHARACTERISTICS OF MONEY
Money should be:
Durable – needs to withstand everyday wear and tear
Portable – needs to be easily carried around
Widely accepted as a means of payment – everyone in the country must agree to accept it as a medium of exchange
Stable in value – must be worth the same over time
Easily divisible – 100 cents = $1.00
Difficult to counterfeit – maintains confidence in the currency
Thabeng M 23055073
ReplyDeleteIt is practical that an EMS learner especially after being introduced to financial concepts, financial literacy and entrepreneurship to be more interested in finding opportunities to cater for the needs around him/herself to prosper. While learning EMS it is always wise to remember this!