What is difference between credit money and full bodied money?

What is difference between credit money and full bodied money?

It refers to the money in terms of coins whose commodity value is equal to the money value aa when they issued… It refers to the money of which money value is greater than commodity value… Means the paper using to made that money is not costly as the value of that note…

What is representative full bodied money?

(ii) Representative Full bodied money – It refers to money which is usually made of paper. The value of representative full-bodied money is much higher than its value as a commodity. It is accepted as money as it can be conveniently used for carrying out transactions.

What is the meaning of credit money?

Credit money is monetary value created as the result of some future obligation or claim. There are many forms of credit money, such as IOUs, bonds and money markets. Virtually any form of financial instrument that cannot or is not meant to be repaid immediately can be construed as a form of credit money.

What do you mean by full bodied money explain with example?

(i) Full Bodied money – Any unit of money, whose face value and intrinsic value are equal, is known as full bodied money, i.e. Money Value = Commodity Value. For example, during the British period, one rupee coin was made of silver and its value as money was same as its value as a commodity.

What is an example of representative money?

Representative money includes things like token coins, paper money and different forms of certificates representing commodities. They have no value of its own and it is not made from the commodity it represents. Gold and silver certificates are two examples of representative money.

What is example of credit money?

There are many forms of credit money, such as IOUs, bonds and money markets. Virtually any form of financial instrument that cannot or is not meant to be repaid immediately can be construed as a form of credit money.

What is the difference between representative full-bodied money and fiat money?

Representative full-bodied money is paper money that is backed by an amount of precious metal equal in value to the face amount of the paper money. Fiat money is paper money without metal backing but where the government decrees the money to be “legal tender” for purposes of making payments and discharging public and private debts.

What is the difference between commodity and representative money?

The value of commodity money derives from the substance or use of the money itself for some purpose. For a detailed look into what commodity money is, and how it compares to fiat money, click here. Representative money occupies a middle ground between fiat and commodity money.

What are the two kinds of representative full-bodied money?

(ii) Representative Full-bodied Money: 1 Two Kinds of Representative Money:. 2 A. Convertible Paper Money:. It refers to the currency notes which are freely convertible into full-bodied money (gold… 3 B. Inconvertible Paper Money:. It is that kind of paper money which cannot be convertible into full-bodied money at the… More

What is representative money and how does it work?

Representative money is government-produced money backed by a physical commodity such as precious metals. Other forms of representative money are still in place, including financial instruments like checks and credit cards. These forms of payment are used today in place of traditional money, with the intent to pay at a later date.