Q. 194.3( 3 Votes )

Distinguish Between modern and traditional forms of money.

Answer :

Modern money


Money is anything that widely accepted for the transaction and which has a monetary value. The modern form of money includes paper notes and coins. Other than these two there are many types of money there are e-money, mobile wallet are some types which are as money currently in our economy. Best fit example of new forms of money that is e-money is Paytm which is widely accepted nowadays. New forms of e-money are not accepted in rural areas by the person who has lack of knowledge on the internet. Paper notes and coins accepted everywhere in India because of it the promissory note issued by the RBI. All the modern money will have the function of the store of value.


Traditional money


Before the advent of paper notes and coins, people used different types of coins such as gold, silver copper which were issued by the government and will have a seal of the government in it. Before the use of coins, goods such as cattle and grains were used for the transaction purpose by the people. The traditional money had less store of value than modern money. The store of value means the money which we save for our future use whereas, goods cannot be saved since it perishes, therefore, it lacks the store of value function.


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