Sunday, July 27, 2014

Revolution In Exchange System

Revolution In Exchange System

In Ancient time excange systen is different here present Revolution in exchange system   

Barter is a system of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money It is distinguishable from gift economies in that the reciprocal exchange is immediate and not delayed in time. It is usually bilateral, but may be multilateral and usually exists parallel to monetary systems in most developed countries, though to a very limited extent. Barter usually replaces money as the method of exchange in times of monetary crisis, such as when the currency may be either unstable  or simply unavailable for conducting commerce.

the Greek philosopher Aristotle contemplated on the nature of money. He considered that every object has two uses, the first being the original purpose for which the object was designed, and the second possibility is to conceive of the object as an item to sell or barter.The assignment of monetary value to an otherwise Insignificant Object such as a coin or promissory note arises as people and their trading associate evolve a psychological capacity to place trust in each other and in External Authority within barter exchange.

Bartering has several problems, most notably that it requires a coincidence of wants. For example, if a wheat farmer needs what a fruit farmer produces, a direct swap is impossible as seasonal fruit would spoil before the grain harvest. A solution is to trade fruit for wheat indirectly through a third, intermediate, commodity the fruit is exchanged for the intermediate commodity when the fruit ripens. If this intermediate commodity doesn't perish and is reliably in demand throughout the year exampal copper, gold, or wine then it can be exchanged for wheat after the harvest. The function of the intermediate commodity as a store of value can be standardized into a widespread commodity money, reducing the coincidence of wants problem. By overcoming the limitations of simple barter, a commodity money makes the market in all other commodities more liquid.

Adam Smith, the father of modern economics, sought to demonstrate that markets and economies pre-existed the state, and hence should be free of government regulation. He argued against conventional wisdom that money was not the creation of governments. Markets emerged, in his view, out of the division of labour, by which individuals began to specialize in specific crafts and hence had to depend on others for subsistence goods. These goods were first exchanged by barter. Specialization depended on trade, but was hindered by the double coincidence of wants which barter requires, i.e. for the exchange to occur, each participant must want what the other has. To complete this hypothetical history, craftsmen would stockpile one particular good, be it salt or metal, that they thought no one would refuse. This is the origin of money according to Smith. Money, as a universally desired medium of exchange, allows each half of the Transaction to be separated.

From 1000 BC money in the shape of small knives and spades made of bronze were in use in the society of China, with cast bronze replicas of cowrie shells in use before this. The first manufactured coins seems to have taken place separately in India, China, and in cities around the Aegean sea between  While these Aegean coins were stamped heated and hammered with insignia, the Indian coins from the Ganges river valley were punched metal disks, and Chinese coins first developed in the Great Plain were cast bronze with holes in the center to be strung together. The different forms and metallurgical process implies a separate development.

Paper money was introduced in Song Dynasty China during the 11th century. The development of the banknote began in the seventh century, with local issues of paper currency. Its roots were in merchant receipts of deposit during the Tang Dynasty, as merchants and wholesalers desired to avoid the heavy bulk of copper coinage in large commercial transactions.The issue of credit notes is often for a limited duration, and at some discount to the promised amount later. The jiaozi nevertheless did not replace coins during the Song Dynasty paper money was used alongside the coins. The central government soon observed the economic advantages of printing paper money, issuing a monopoly right of several of the deposit shops to the issuance of these certificates of deposit.By the early 12th century, the amount of banknotes issued in a single year amounted to an annual rate of 26 million strings of cash coins.

Now it is a Mordern Exchange Methods

A Credit Card is a payment Card issued to users as a system of payment. It allows the cardholder to pay for goods and services based on the holder's promise to pay for them.The issuer of the card creates a revolving account and grants a line of credit to the consumer from which the user can borrow money for payment to a merchant or as a cash advance to the user.

Online banking is an Electronic payment System that enables customers of a financial institution to conduct financial transactions on a website operated by the institution, such as a retail bank, virtual bank, credit union or building society. Online banking is also referred as Internet banking, e-banking, virtual banking and by other terms.

To access a financial institution's online banking facility, a customer with Internet access would need to register with the institution for the service, and set up some password  for customer verification. The password for Online Banking is normally not the same as for Telephone Banking. Financial institutions now routinely allocate customers numbers, whether or not customers have indicated an intention to access their online banking facility. Customers numbers are normally not the same as account numbers, because a number of customer accounts can be linked to the one customer number. The customer can link to the customer number any account which the customer controls, which may be cheque, savings, loan, credit card and other accounts. Customer numbers will also not be the same as any debit or credit card issued by the Financial Institution to the customer.

To Access Online Banking, a customer would go to the Financial Institution's secured website, and enter the online banking facility using the customer number and password previously setup. Some financial institutions have set up additional security steps for access to online banking, but there is no consistency to the approach adopted.

So That is The Revolution in Exchange System in last Decades which open the ways for convinient exchange. 

Failure of Barter System,
Advertising in Barter System,
Best Credit Cards,
American Express Credit Card,
Online Banking,
Electronic payment System,
Barter system, 
Bartering has several problems,
Barter System in India,
Barter Trade,
Barter Exchange,
Difficulties of Barter System,

Mohini Porwal [ B Sc]
Trainee Aviation News Editor

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