Question

1. What is money? In the contemporary global economy, why has fiat money supplanted commodity money in economic and financial transactions?

2. Discuss the importance of depository institutions in the contemporary global financial system. Over the years, some banks have failed woefully; with reference to any two banks, briefly explain the reasons for bank failures

Please answer in full sentences. thank you

Answer 1

Money is the value which is acceptable to all. It is described as below:
Money is accepted by any goods that by out It a unit of a value which can be anybody i u exchange at and services. st is, which has value o generally recognised as exchange goods ar services. In the contemporary global economy Commodity money it supplanted by the fat money. Commodity money is backed by any goods or substance gt means that the value of commodity money was was deuded by virtue of the substance by which the money Made of

However, Fiat money is the currene regulated by the governnlent hat money is used in the modern enorronment Fial nong the money whose value ii & fixed by the government и соии Therefore, due to the amral of the fat money commodity Money was supplanted becaur it was not legal and its value i was é notre fixed Fiat money in the money which ď acceptable for all lowerer i Case af Commedity money it a te based on it the physical so goods or u