Concept of Money

Plastic Money;

Plastic money means the credit cards and plastic cards which have silicon chips M&ta specially printed set of characters; These' Cards are used for making payments at and at EFTPOS (Electronic Funds Transfer at Point of Sale).
The plastic money; smart cards and credit cards are described in the last section of
this book. -
Other Forms:
Besides these forms, money can be classified into several other less important forms. These include the following:
(a) Black Money: Black money is one which has been gathered through illegal
means. All the wealth obtained through prohibited ways such" as'gambling,
smuggling, crime, robbery etc can ,be called black mortey. An important
characteristic of the black money is that it is not reported in the calculation-oil
GDP or NI. These are unreported activities and form part of underground economy.
(b) White Money; White money is one which has been earned through legal and
legitimate means. The holding of such a money is justifiable .on social, moral,
legal and equity basis. Such a money is not merely a wealth but it has satisfactieny
. content, happiness, associated with it.
(c) Cheap Moneys Cheap money is one whose cost of borrowing is less than the
standard rate of interest. In times of recessions banks are wilting to .lend money at
a lower rate of interest that generally prevails in the economy. Such a money is
called cheap money.
Dear money: In times of boom there is a high demand for money. To control' it banks usually increase the interest rate above normal level. The cost of borrowing the money then increases. Such a.money is called the dear money. Important Note:,
Under advantages of metallic money it is written that it can't be hoarded or melted. This means that if the value of content of coin is greater than its face value, the people will melt it into metal block to take advantage of its high intrinsic"Value'. To understand this suppose government issue coins of 1: rupee. Further suppose that they are made up of 1 gm 'silver. This means the coin that is made up of 1 gm silver has face value of 1 rupee but intrinsic (internal) value of 1 gm silver ( Suppose 1 gm silver is equal to 5 rupees) ill induce people to collect melt them ordinary materiel blocks and sell them for Rs. 5 each. It's result.will be that very soon coins will disappear from the market and there will be liquidity problem.