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I studied PPE at Lady Margaret Hall college, Oxford University, and currently work as an Economics A Level teacher. I have also examined several different economic units for Edexcel AS and A2.
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what would happen if india be the only exporter of gold?
Brother Sinu
First of all I will tell you what makes anything money. It is just a property which makes anything money. This property is that we psychologically recognize some quantities as money for example gold, currency etc.
We psychologically starts to believe that these units store value. So it is purchasing power of any unit which makes it money. Some precious metals like gold attracts human naturally and some legally like currency.
Purchasing power or value which currency stores , depend on production of services or goods of that particular country . Means to say all value is goods and services of that particular country and govt makes currency notes for storing that value.
Any single country (except European countries etc) can print as much currency as it like. But this does not make it rich. Even Bangladesh can print Bangla currency which would be equal to 100billion dollar at current exchange rates . But this will not even make 1dollar rich to Bangadesh. It is Bangladesh ‘s production which will make country rich. If it print more currency value which currency stores will decrease.
Govt prints currency to fulfill exchange related needs of particular country.
It has no need convert all money into currency. Practically most money of govt is in form of public deposit certificates etc. Only very little part is converted into currency.
Govt generally increase money supply in form of budget deficits.
Govt create money to fulfill the need of budget.
Thanks
Raj,
Thanks for your reply. I agree that money is created. But my question is where and how it is created? Let me put my question in another way. Govt. prints currency right. When they print currency at what amount and how they distribute that currency? I think currency is one form of money. Thanks.
-Srinu
Hi sampathgunukula
It is definitely tourism sector. It is one type of export where we provide our service or product to people of foreign countries.
It will help consumption industry of country.
Srinu ji
It is very simple. It is different case than energy. Energy can take form of mass as energy and mass are same according to fundamentals of physics. In economics generally we believe money is created. We create money. Paper does not make currency money, it is storage power of particular legal paper which make it money.
Money is nothing more than purchasing power of any unit.
We create this purchasing power. If all united states stop work, storage power of united states dollar would definitely diminish.
Yes if you want to take money as energy ‘s definition you can take.
After all money is also created from resources which themselves are at some level form of money. Labor, land, minerals etc all create value and all these sources also have value .
Thanks,
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In terms of economy, the visit by foreign nationals to witness the XIX Common Wealth Games in India amounted to
Export or Consumption
My analysis is If you consider national accounts it will come under invisible export, but in terms of economy it will come under consumption, plz answer my question