Question

TOPIC DESCRIPTION For this ussion forrn, begnbyreading the following statement ard decide whether you agree or disagree with the statement American paper money is worthless-we would be better off going back to a barter system. discuss the reasons why you agree or disagree with the above statement. What evidence from the lesson or outside research can you find that supports your stand? In a post of several How can you connect your argument with the terms and ideas we have studied in this lesson? Include in your post evidence for your stand, especially related to the reasons why money s used and the roles that money plays in the economy

Answer 1

Case Specifics:-

All modern societies have developed means and resources, to be able to buy and sell or basically to exchange goods and services in the economy to be able to satisfy their needs and wants. The results of this is that production capacities have increased way beyond desires of people and have focused on luxuries of life and have even gone beyond to try and make earlier thought of luxuries to become normal utility items example the mobile phone revolution.

But let us imagine what would happen if money as we know today, had failed to exist. Since the evolution of mankind to allow for economics and trade to happen, they engaged in exchange of goods and services. For this they would exchange them randomly without any imperial means of knowing the relationship between the two. So a shoe manufacturer would sell his shoes in return for wheat for filling his stomach. This was known as barter system

The barter system led to numerous problems which included but were not limited to double coincidence of wants and that no future payments could be done. Further the value of goods could not be compared and physical presence was necessary to exchange products of any kind.

This problem was addressed by the monetary system, which came in America and rest of the world and involved currencies such as dollar as a medium for exchange.

The shoe seller thus could sell his shoes for money and then buy wheat in quantities he desires, at the time at which he desires without worrying whether in the future his shoes would sell since he would be able to hold money with him and buy the product whenever desired.

The American economy, in my opinion is one of the strongest countries in the world when it comes to currency management and long term growth. The country allows for easier trade to occur and should therefore disallow the illogical debate of Turing to a barter system again.

No country can survive in the modern times, if it started exchanging goods in return for money. It is very difficult to compare the prices of two products without the concepts of money and the entire banking sector would collapse without the role of paper money coming into play.

Consider this, with no currency in play, how would you ever get a loan for buying a property or a car or anything which you want to ? You would have to sell something of value to the seller in return for buying the product. This in any developed or developing country is not going to happen and is not recommended also. The entire concepts of banking which have been developed over centuries would fail if the government was to take such a decision to allow barter to again come into existence.

Thus, in my opinion the barter system has correctly been replaced by the monetary system which involves currencies since it allows for easier sale and purchase of goods and helps in maintaining a system in which future payments can easily be managed by people.

Please feel free to ask your doubts in the comments section