Money Banking & Finance

Calculation of Macro Economic Variables;
Money has made it possible to calculate and determine different macro-econ variables such as GDP, GNP, NT, etc. It has created a whole new field of econ< sciences. Money and finance management have now, become equally important for r nationals and a sole proprietor,
7. Distribution of National Income:
.The distribution of NI is also based on money. Government with the hel money can distribute resources among various poor sectors of the economy. It is
possible to make reliable comparison about standards of living in different areas 0]
world. The poverty line is also stated in terms of currency units. This line indicates degree of poverty in the economy.
8. Public Finance:
The tax collection and the imposition uC Iivw UIAC5 arc possible JUSt DCCaUSC
have money in our economy. Taxes are imposed by governments on the money inci of people. These are collected also in terms of money.
9. Borrowing and Debt Servicing:
The loan that you take from your friend-and the borrowing of the governn from IMF, all these are possible only because there is money flowing in the econo Further the debt servicing and rescheduling is also possible because of existence* money. Just imagine how awkward would it be to reschedule a debt if you are living moneyless economy.
10. Satisfaction and Optimal Use of Resources:
Money is important as it helps in determining the standard of satisfaction ; optimal allocation of resources. The profitability, productivity and efficiency n1 ^.sured in money terms. These measures help in determining the profitable volume sates and usage of resources.
11. Working of Banks & Financial Institutions:
Money is-ihe basis for the functions and operations of banks and financial institutic It is also equally important for money lenders, brokerage houses, acceptance houses and for
those.who generate their livelihood just because there is money in the World.
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12. International Trade:
Money has also greatly expanded the international trade. The difference betwt costs of production among various parts of world can be calculated as we have got mor to value scarce as well as abundant resources. This difference in costs leads to the gai of international trade.