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Article Review: Money and Inflation - Essay Example
Finance & Accounting
Pages 3 (753 words)
MONEY AND INFLATION Name Professor Institution Course Date Money is the main key in today’s lives. Money makes the world go round money made work easier since people don’t have to batter trade in exchange for goods and services. Most of the countries in the world are doing their best to eradicate the rates of inflation in whatever way they can so as to make money one has to invest…
Most likely firms invest in new technology to increase the productivity of their employees and that of their customers. To ensure that the investment goes through the given firm has to consider the potential return on the investment. This is the measure of performance and the effectiveness of an investment. However money is also know as a store for value, it holds its value over time it is also a second unit of account that’s why prices are often quoted in terms of money. Money is the only form that is accepted in every part of the word as a form of payment making it a medium of exchange in all parts of the world. Even though one has money for either purchasing goods or services money has limits to serve its given functions. Higher and increasing rates of inflation make money less useful in many given ways. When the rate of inflation is high, the longer the money stays in cash the more value it loses. Hence making most of the people spend it quickly rather than holding it for longer time. When such situations emerge money does not as an effective store of value. However if high rates of inflation the rate of transactions in the given region increases rapidly. On the other hand if the rate of inflation goes higher the usefulness of money as a unit of account weakens. ...
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