1. BARTER SYSTEM AND EVOLUTION OF MONEY

2. BARTER SYSTEM- HISTORICAL
Introduction-
Money is something which is generally accepted as a medium of exchange. It is one of the most basic and significant inventions of mankind. Before money came into use, exchange took place through barter system, i.e. , goods were exchanged for goods.
Definition-
Barter means direct exchange of goods or barter refers to exchanging of goods without the use of money. For example, corn may be exchanged for cloth, house for horses, fruits for utensils and so on.

3. ADVANTAGES OF BARTER SYSTEM
Simple system
No Question of Under- Production, or of Un-Employment or of Over- Full Employment
No Problems of International Trade
Ideal Utilisation of Natural Resources
No Problem of Concentration of Economic Power in one hand.

4. DIFFICULTIES OF BARTER SYSTEM
Barter system involves various difficulties and inconveniencies which are discussed below:
Double Coincidence of Wants
Absence of Common Measure of value
Lack of Divisibility
The Problem of Storing wealth
Difficulty of Deferred Payments
Problem Of Transportation

5. EVOLUTION OF MONEY INVENTION Of MONEY:
In order to overcome the difficulties of barter system money was invented.
According to Crowther-
“Money is one of the most fundamental of all man’s inventions. Every branch of knowledge has its fundamental discovery. In mechanics its wheel, in science fire, in politics vote. Similarly, in economics, in the whole commercial side of man’s social existence, money is the essential invention of which all the rest is based.”

6. ORIGIN & DEVELOPMENT OF MONEY
DEVELOPMENT OF MONEY: The origin of money is not known because of non-availability of recorded information; its deep rooted in antiquity. The evolution of money has been a secular process and shall continue to remain so, but the development of money in the present form can be historically traced as it has passed through different stages in accordance with the growth human civilisation.

7. STAGES OF DEVELOPMENT (OF MONEY)
These stages are discussed below:
Animal Money
Commodity Money
Metallic Money
Paper Money
Credit Money
Electronic banking Stage

8. CLASSIFICATION OF MONEY
Main types of money exist in a modern economy:
1.Metallic money:
Standard Money
Token Money
2.Paper Money:
Representative Paper money
Convertible Paper Money
Inconvertible Paper Money
Fiat Money
3. Credit Money
4. Near money

9. DEFINITION OF MONEY
According to Walker, “Money is what money does.” Crowther defines it, “anything that is generally acceptable as a means of exchange and at the same time act as a measure and store of value.”

10. APPROACHES TO THE DEFINITION OF MONEY
On the basis of the constituents of money, the following four approaches to the money are generally followed:
Traditional Approach:
M= C+DD
(where C= currency, DD= demand deposits)
Monetarist Approach:
M= C+DD+TD
(where C= currency, DD= demand deposits, TD= time deposit)

11. APPROACHES TO THE DEFINITION OF MONEY-…contd
Liquidity Approach: M=C+DD+TD+SB+S etc (where C= currency, DD= demand deposits, TD= time deposit, SB= saving bank deposits, S= shares) The Central Bank Approach: M= C+DD+TD+NBFI+CUA

12. FUNCTIONS OF MONEY
Various functions of money can be classified into three broad groups:
1.Primary Functions:
Medium of Exchange
Measure of Value
2. Secondary Functions:
Standard of Deferred Payments
Store of Value
Transfer of Value

13. FUNCTIONS OF MONEY….contd
3. Contingent Functions:
Distribution of National Income
Maximisation of Satisfaction
Basis of Credit System
Liquidity To Wealth

14. THE END