1.
Money
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The main functions of money are distinguished as, a medium of exchange, a unit of account, a store of value, and, sometimes, a standard of deferred payment. Any item or verifiable record that fulfills these functions can be considered as money, Money is historically an emergent market phenomenon establishing a commodity money, but nearly all contemporary money systems are based on fiat money. Fiat money, like any check or note of debt, is without use value as a physical commodity. It derives its value by being declared by a government to be legal tender, the money supply of a country consists of currency and, depending on the particular definition used, one or more types of bank money. Bank money, which consists only of records, forms by far the largest part of money in developed countries. The word money is believed to originate from a temple of Juno, in the ancient world Juno was often associated with money. The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located, the name Juno may derive from the Etruscan goddess Uni and Moneta either from the Latin word monere or the Greek word moneres. In the Western world, a prevalent term for coin-money has been specie, stemming from Latin in specie, meaning in kind. The use of methods may date back to at least 100,000 years ago. Instead, non-monetary societies operated largely along the principles of gift economy, when barter did in fact occur, it was usually between either complete strangers or potential enemies. Many cultures around the world eventually developed the use of commodity money, the Mesopotamian shekel was a unit of weight, and relied on the mass of something like 160 grains of barley. The first usage of the came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money – often, according to Herodotus, the Lydians were the first people to introduce the use of gold and silver coins. It is thought by scholars that these first stamped coins were minted around 650–600 BC. The system of commodity money eventually evolved into a system of representative money and this occurred because gold and silver merchants or banks would issue receipts to their depositors – redeemable for the commodity money deposited. Eventually, these became generally accepted as a means of payment and were used as money. Paper money or banknotes were first used in China during the Song Dynasty and these banknotes, known as jiaozi, evolved from promissory notes that had been used since the 7th century. However, they did not displace commodity money, and were used alongside coins, in the 13th century, paper money became known in Europe through the accounts of travelers, such as Marco Polo and William of Rubruck
2.
Goods
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In economics, goods are materials that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods that are property, and services, which are non-physical. A good is an item that is useful to people but scarce in relation to its demand. In contrast, free goods, such as air, are naturally in abundant supply, commodities may be used as a synonym for economic goods but often refer to marketable raw materials and primary products. Although in economic theory all goods are considered tangible, in reality certain classes of goods, such as information, only take intangible forms. For example, among other goods an apple is an object, while news belongs to an intangible class of goods. Goods may increase or decrease their utility directly or indirectly and may be described as having marginal utility, some things are useful, but not scarce enough to have monetary value, such as the Earths atmosphere, these are referred to as free goods. In economics, a bad is the opposite of a good, Goods diversity allows for their classification into different categories based on distinctive characteristics, such as tangibility and relative elasticity. A tangible good like an apple differs from a good like information due to the impossibility of a person to physically hold the latter. Intangible goods differ from services in that goods are transferable and can be traded. Price elasticity also differentiates types of goods, an inelastic good is one for which there are few or no substitutes, such as tickets to major sporting events, original works by famous artists, and prescription medicine such as insulin. Complementary goods are generally more inelastic than goods in a family of substitutes and this is because hamburger buns and beef are complementary goods. It is important to note that goods considered complements or substitutes are relative associations, the following chart illustrates the classification of goods according to their exclusivity and competitiveness. Goods are capable of being delivered to a consumer. Goods that are economic intangibles can only be stored, delivered, Goods, both tangibles and intangibles, may involve the transfer of product ownership to the consumer. Services do not normally involve transfer of ownership of the service itself, for example, distributing electricity among consumers is a service provided by an electric utility company. While the service is a process that remains in its entirety in the ownership of the service provider. The consumer becomes electric energy owner by purchase and may use it for any lawful purposes just like any other goods, fast-moving consumer goods Final goods Intangible asset Intangible good List of economics topics Goods and services Service Tangible property Bannock, Graham et al
3.
Farmers' market
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A farmers market is a physical retail market featuring foods sold directly by farmers to consumers. Farmers markets typically consist of booths, tables or stands, outdoors or indoors, where farmers sell fruits, vegetables, meats, Farmers markets exist worldwide and reflect their local culture and economy. Their size ranges from a few stalls to several city blocks, the current concept of a farmers market is similar to past concepts, but different in relation to other forms – as aspects of consumer retailing, overall, continue to shift over time. Similar forms existed before the Industrial age, but often formed part of broader markets, trading posts began a shift toward retailers who sold others products more than their own. Modern industrial food productions advantages over prior methods depend largely on modern, cheap, fast transport, but transport costs and delays cannot be completely eliminated. So where distance strained industrial suppliers reach, where consumers had strong preference for local variety, starting in the mid-2000s, consumer demand for foods that are fresher and for foods with more variety—has led to growth of farmers markets as a food-retailing mechanism. It has been claimed that farmers markets can offer farmers increased profit over selling to wholesalers, food processors, by selling directly to consumers, produce often needs less transport, less handling, less refrigeration and less time in storage. By selling in a market, the cost of land, buildings. Farmers may also retain profit on produce not sold to consumers, by selling the excess to canneries, at the market, farmers can retain the full premium for part of their produce, instead of only a processors wholesale price for the entire lot. Some farmers may also prefer the simplicity, immediacy, transparency, with fewer intermediaries, the support of independent growers by local community members can enhance local economic opportunities and health & wellness in poor communities. Some consumers may favor farmers markets for the perceived, reduced overhead, driving, parking, etc. fresher foods seasonal foods healthier foods a better variety of foods, e. g. In some cases claimed to sell products from their own farm at first. In at least one case despite vendor claims to the contrary the farm in question was not growing any food, in many cases fraud is obvious because the type of food being sold does not grow locally or is out of season. Federal regulations in the United States require country of origin labelling for produce at supermarkets, in the United States, the FDA requires that the manufacturers name and address be listed on the food label, which can reveal this discrepancy. In New York City, there are 107 farmers markets in operation, in the Los Angeles area,88 farmers markets exist, many of which support Hispanic and Asian fare. Since the first farmers market was established in the UK in 1997, consumers were worried about the farming practices by which food is produced, processed and the health and safety aspects of certain foods. The emergence of books, magazine articles, and cookery and gardening programmes influence consumer concern of food preparation and consumption, the EU has formalized efforts to expand farmers markets to reduce food safety risks and poor nutrition through programs known as Farm to Fork. Some markets are strictly managed, with rules for pricing, quality, others are much more relaxed in their operations and vendor criteria
4.
Contract
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A contract is a voluntary arrangement between two or more parties that is enforceable by law as a binding legal agreement. Contract is a branch of the law of obligations in jurisdictions of the civil law tradition, Contract law concerns the rights and duties that arise from agreements. A contract arises when the parties agree that there is an agreement, formation of a contract generally requires an offer, acceptance, consideration, and a mutual intent to be bound. Each party to a contract must have capacity to enter the agreement, minors, intoxicated persons, and those under a mental affliction may have insufficient capacity to enter a contract. Some types of contracts may require formalities, such as a memorialization in writing, at common law, the elements of a contract are offer, acceptance, intention to create legal relations, and consideration. Not all agreements are necessarily contractual, as the parties generally must be deemed to have an intention to be legally bound, a so-called gentlemens agreement is one which is not intended to be legally enforceable, and which is binding in honour only. In order for a contract to be formed, the parties must reach mutual assent and this is typically reached through offer and an acceptance which does not vary the offers terms, which is known as the mirror image rule. An offer is a statement of the offerors willingness to be bound should certain conditions be met. If a purported acceptance does vary the terms of an offer, it is not an acceptance but a counteroffer and, therefore, the Uniform Commercial Code disposes of the mirror image rule in §2-207, although the UCC only governs transactions in goods in the USA. As a court cannot read minds, the intent of the parties is interpreted objectively from the perspective of a reasonable person and it is important to note that where an offer specifies a particular mode of acceptance, only an acceptance communicated via that method will be valid. Contracts may be bilateral or unilateral, a bilateral contract is an agreement in which each of the parties to the contract makes a promise or set of promises to each other. For example, in a contract for the sale of a home, less common are unilateral contracts in which one party makes a promise, but the other side does not promise anything. In these cases, those accepting the offer are not required to communicate their acceptance to the offeror, in a reward contract, for example, a person who has lost a dog could promise a reward if the dog is found, through publication or orally. The payment could be conditioned on the dog being returned alive. Those who learn of the reward are not required to search for the dog, but if someone finds the dog and delivers it, the High Court of Australia stated that the term unilateral contract is unscientific and misleading. In certain circumstances, a contract may be created. A contract is implied in fact if the circumstances imply that parties have reached an agreement even though they have not done so expressly, quantum meruit claims are an example. Carbolic, a firm, advertised a smoke ball marketed as a wonder drug that would, according to the instructions
5.
Communication
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Communication is the act of conveying intended meanings from one entity or group to another through the use of mutually understood signs and semiotic rules. The main steps inherent to all communication are, The forming of communicative motivation or reason, transmission of the encoded message as a sequence of signals using a specific channel or medium. Noise sources such as forces and in some cases human activity begin influencing the quality of signals propagating from the sender to one or more receivers. Reception of signals and reassemblying of the message from a sequence of received signals. Decoding of the encoded message. Interpretation and making sense of the original message. The channel of communication can be visual, auditory, tactile and haptic, olfactory, electromagnetic, human communication is unique for its extensive use of abstract language. Development of civilization has been linked with progress in telecommunication. Nonverbal communication describes the process of conveying information in the form of non-linguistic representations, examples of nonverbal communication include haptic communication, chronemic communication, gestures, body language, facial expressions, eye contact, and how one dresses. Nonverbal communication also relates to intent of a message, examples of intent are voluntary, intentional movements like shaking a hand or winking, as well as involuntary, such as sweating. Speech also contains nonverbal elements known as paralanguage, e. g. rhythm, intonation, tempo and it affects communication most at the subconscious level and establishes trust. Likewise, written texts include nonverbal elements such as handwriting style, spatial arrangement of words, Nonverbal communication demonstrates one of Wazlawicks laws, you cannot not communicate. Once proximity has formed awareness, living creatures begin interpreting any signals received, Nonverbal cues are heavily relied on to express communication and to interpret others’ communication and can replace or substitute verbal messages. There are several reasons as to why non-verbal communication plays a role in communication. Written communication can also have non-verbal attributes, e-mails and web chats allow individual’s the option to change text font colours, stationary, emoticons, and capitalization in order to capture non-verbal cues into a verbal medium. Many different non-verbal channels are engaged at the time in communication acts. “Non-verbal behaviours may form a language system. ”Smiling, crying, pointing, caressing. Such non-verbal signals allow the most basic form of communication when verbal communication is not effective due to language barriers, Verbal communication is the spoken or written conveyance of a message
6.
Sales
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A sale is the exchange of a commodity or money as the price of a good or a service. Sales is activity related to selling or the amount of goods or services sold in a time period. The seller or the provider of the goods or services completes a sale in response to an acquisition, appropriation, requisition or an interaction with the buyer at the point of sale. There is a passing of title of the item, and the settlement of a price, the seller, not the purchaser generally executes the sale and it may be completed prior to the obligation of payment. In common law countries, sales are governed generally by the common law, a person or organization expressing an interest in acquiring the offered item of value is referred to as a potential buyer, prospective customer or prospect. Buying and selling are understood to be two sides of the coin or transaction. Both seller and buyer engage in a process of negotiation to consummate the exchange of values, the exchange, or selling, process has implied rules and identifiable stages. It is implied that the process will proceed fairly and ethically so that the parties end up nearly equally rewarded. Sometimes, sellers have to use their own experiences when selling products with appropriate discounts, from a management viewpoint it is thought of as a part of marketing, although the skills required are different. Sales often forms a separate grouping in a structure, employing separate specialist operatives known as salespersons. Selling is considered by many to be a sort of persuading art, selling is the profession-wide term, much like marketing defines a profession. Recently, attempts have been made to understand who is in the sales profession. There are many articles looking at marketing, advertising, promotions, two common terms used to describe a salesperson are Farmer and Hunter. The reality is that most professional sales people have a little of both, a hunter is often associated with aggressive personalities who use aggressive sales technique. In terms of sales methodology a hunter refers to a person whose focus is on bringing in and this process is called sales capturing. An example is a commodity such as a long distance sales person, shoe sales person. Their job is to find and convert buyers, a sales farmer is someone who creates sales demand by activities that directly influence and alter the buying process. Many believe that the focus of selling is on the agents involved in the exchange between buyer and seller
7.
Trade
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Trade, or commerce, involves the transfer of goods or services from one person or entity to another, often in exchange for money. A network that allows trade is called a market, the original form of trade, barter, saw the direct exchange of goods and services for other goods and services. Barter is trading things without the use of money, later one side of the barter started to involve precious metals, which gained symbolic as well as practical importance. Modern traders generally negotiate through a medium of exchange, such as money, as a result, buying can be separated from selling, or earning. The invention of money greatly simplified and promoted trade, Trade between two traders is called bilateral trade, while trade between more than two traders is called multilateral trade. Trade exists due to the specialization and division of labor, in which most people concentrate on an aspect of production. As such, trade at prices between locations can benefit both locations. Trade originated with human communication in prehistoric times, trading was the main facility of prehistoric people, who bartered goods and services from each other before the innovation of modern-day currency. Peter Watson dates the history of commerce from circa 150,000 years ago. In the Mediterranean region the earliest contact between cultures were of members of the species Homo sapiens principally using the Danube river, at a time beginning 35–30,000 BCE, Trade is believed to have taken place throughout much of recorded human history. There is evidence of the exchange of obsidian and flint during the stone age, Trade in obsidian is believed to have taken place in Guinea from 17,000 BCE. The earliest use of obsidian in the Near East dates to the Lower, Trade in the stone age was investigated by Robert Carr Bosanquet in excavations of 1901. Trade is believed to have first begun in south west Asia, obsidian was traded at distances of 900 kilometres within the Mediterranean region. Trade in the Mediterranean during the Neolithic of Europe was greatest in this material, networks were in existence at around 12,000 BCE Anatolia was the source primarily for trade with the Levant, Iran and Egypt according to Zarins study of 1990. Melos and Lipari sources produced among the most widespread trading in the Mediterranean region as known to archaeology, the Sari-i-Sang mine in the mountains of Afghanistan was the largest source for trade of Lapis Lazuli. The material was most largely traded during the Kassite period of Babylonia beginning 1595 BCE, ebla was a prominent trading centre during the third millennia, with a network reaching into Anatolia and north Mesopotamia. Materials used for creating jewelry were traded with Egypt since 3000 BCE, long-range trade routes first appeared in the 3rd millennium BCE, when Sumerians in Mesopotamia traded with the Harappan civilization of the Indus Valley. The Phoenicians were noted sea traders, traveling across the Mediterranean Sea, for this purpose they established trade colonies the Greeks called emporia
8.
Asset
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In financial accounting, an asset is an economic resource. Anything tangible or intangible that can be owned or controlled to produce value, simply stated, assets represent value of ownership that can be converted into cash. The balance sheet of a firm records the value of the assets owned by that firm. It covers money and other valuables belonging to an individual or to a business, one can classify assets into two major asset classes, tangible assets and intangible assets. Tangible assets contain various subclasses, including current assets and fixed assets, current assets include inventory, while fixed assets include such items as buildings and equipment. Intangible assets are resources and rights that have a value to the firm because they give the firm some kind of advantage in the marketplace. Examples of intangible assets include goodwill, copyrights, trademarks, patents and computer programs, an asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity. One of the most widely accepted accounting definitions of asset is the one used by the International Accounting Standards Board, employees are not considered assets like machinery is, even though they can generate future economic benefits. This is because an entity does not have sufficient control over its employees to satisfy the Frameworks definition of an asset, similarly, in economics an asset is any form in which wealth can be held. The accounting equation is the structure of the balance sheet. It relates assets, liabilities, and owners equity, Assets = Liabilities + Capital Liabilities = Assets − Capital Equity = Assets − Liabilities Assets are listed on the balance sheet. On a companys balance sheet certain divisions are required by generally accepted accounting principles, Assets can be divided into e. g. current assets and fixed assets, often with further subdivisions such as cash, receivables and inventory. Assets are formally controlled and managed within larger organizations via the use of asset tracking tools and these monitor the purchasing, upgrading, servicing, licensing, disposal etc. of both physical and non-physical assets. Current assets are cash and other assets expected to be converted to cash or consumed either in a year or in the operating cycle and these assets are continually turned over in the course of a business during normal business activity. There are 5 major items included into current assets, Cash and cash equivalents – it is the most liquid asset, which includes currency, deposit accounts, short-term investments – include securities bought and held for sale in the near future to generate income on short-term price differences. Receivables – usually reported as net of allowance for non-collectable accounts, inventory – trading these assets is a normal business of a company. The inventory value reported on the sheet is usually the historical cost or fair market value. This is known as the lower of cost or market rule, prepaid expenses – these are expenses paid in cash and recorded as assets before they are used or consumed
9.
Information
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In other words, it is the answer to a question of some kind. It is thus related to data and knowledge, as data represents values attributed to parameters, as it regards data, the informations existence is not necessarily coupled to an observer, while in the case of knowledge, the information requires a cognitive observer. At its most fundamental, information is any propagation of cause, Information can be encoded into various forms for transmission and interpretation. It can also be encrypted for safe storage and communication, the uncertainty of an event is measured by its probability of occurrence and is inversely proportional to that. The more uncertain an event, the information is required to resolve uncertainty of that event. The bit is a unit of information, but other units such as the nat may be used. Example, information in one fair coin flip, log2 =1 bit, the concept that information is the message has different meanings in different contexts. The English word was derived from the Latin stem of the nominative. Inform itself comes from the Latin verb informare, which means to give form, eidos can also be associated with thought, proposition, or even concept. The ancient Greek word for information is πληροφορία, which transliterates from πλήρης fully and it literally means fully bears or conveys fully. In modern Greek language the word Πληροφορία is still in use and has the same meaning as the word information in English. In addition to its meaning, the word Πληροφορία as a symbol has deep roots in Aristotles semiotic triangle. In this regard it can be interpreted to communicate information to the one decoding that specific type of sign, from the stance of information theory, information is taken as an ordered sequence of symbols from an alphabet, say an input alphabet χ, and an output alphabet ϒ. Information processing consists of a function that maps any input sequence from χ into an output sequence from ϒ. The mapping may be probabilistic or deterministic and it may have memory or be memoryless. Often information can be viewed as a type of input to an organism or system, inputs are of two kinds, some inputs are important to the function of the organism or system by themselves. In his book Sensory Ecology Dusenbery called these causal inputs, other inputs are important only because they are associated with causal inputs and can be used to predict the occurrence of a causal input at a later time. Some information is important because of association with information but eventually there must be a connection to a causal input
10.
Service (economics)
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In economics, a service is a transaction in which no physical goods is transferred from the seller to the buyer. The benefits of such a service are held to be demonstrated by the willingness to make the exchange. Public services are those that society as a whole pays for, using resources, skill, ingenuity, and experience, service providers benefit service consumers. Services can be described in terms of their key characteristics, sometimes called the Five Is of Services and they are not manufactured, transported or stocked. Services cannot be stored for a future use and they are produced and consumed simultaneously. Services are perishable in two regards, Service-relevant resources, processes and systems are assigned for delivery during a specific period in time. If the service consumer does not request and consume the service during this period, from the perspective of the service provider, this is a lost business opportunity if no other use for those resources is available. Examples, A hairdresser serves another client, an empty seat on an airplane cannot be filled after departure. When the service has been rendered to the consumer, this particular service irreversibly vanishes. Example, a passenger has been transported to the destination and the flight is over, the service provider must deliver the service at the time of service consumption. The service is not manifested in an object that is independent of the provider. The service consumer is also inseparable from service delivery, examples, The service consumer must sit in the hairdressers chair, or in the airplane seat. Correspondingly, the hairdresser or the pilot must be in the shop or plane, respectively, many services are regarded as heterogeneous and are typically modified for each service consumer or each service context. Another and more common term for this is heterogeneity, both service provider and service consumer participate in the service provision. Mass generation and delivery of services must be mastered for a provider to expand. This can be seen as a problem of service quality, both inputs and outputs to the processes involved providing services are highly variable, as are the relationships between these processes, making it difficult to maintain consistent service quality. Many services involve variable human activity, rather than a precisely determined process, the human factor is often the key success factor in service provision. Demand can vary by season, time of day, business cycle, consistency is necessary to create enduring business relationships
11.
History of money
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The history of money concerns the development of means of carrying out transactions involving a medium of exchange. Money is any clearly identifiable object of value that is accepted as payment for goods and services. Precious metals, from which early coins were made, fall into both categories, in modern times the broader concept of money includes other forms of money such as bank accounts. The history of money also includes such as credit cards. Numismatics is the study of money such as coins and paper money. In Politics Book 1,9 the Greek philosopher Aristotle contemplated on the nature of money, the capacity to carry out barter transactions is limited in that it depends on a coincidence of wants. The seller of food grain has to find the buyer who wants to buy grain, in his book Debt, The First 5000 Years, anthropologist David Graeber argues against the suggestion that money was invented to replace barter. The problem with this version of history, he suggests, is the lack of any supporting evidence and his research indicates that gift economies were common, at least at the beginnings of the first agrarian societies, when humans used elaborate credit systems. Graeber proposes that money as a unit of account was invented the moment when the unquantifiable obligation I owe you one transformed into the notion of I owe you one unit of something. In this view, money emerged first as credit and only acquired the functions of a medium of exchange. In a gift economy, valuable goods and services are given without any explicit agreement for immediate or future rewards. Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community, there are various social theories concerning gift economies. Some consider the gifts to be a form of reciprocal altruism, another interpretation is that implicit I owe you debt and social status are awarded in return for the gifts. Consider for example, the sharing of food in some hunter-gatherer societies and this custom may reflect altruism, it may be a form of informal insurance, or may bring with it social status or other benefits. Anatolian obsidian as a raw material for tools was distributed as early as 15,000 BCE. In Sardinia, one of the four sites for sourcing the material deposits of obsidian within the Mediterranean. As early as 9000 BCE both grain and cattle were used as money or as barter. The worship of Moneta is recorded by Livy with the built in the time of Rome 413
12.
Gold
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Gold is a chemical element with symbol Au and atomic number 79. In its purest form, it is a bright, slightly yellow, dense, soft, malleable. Chemically, gold is a metal and a group 11 element. It is one of the least reactive chemical elements and is solid under standard conditions, Gold often occurs in free elemental form, as nuggets or grains, in rocks, in veins, and in alluvial deposits. It occurs in a solid solution series with the element silver and also naturally alloyed with copper. Less commonly, it occurs in minerals as gold compounds, often with tellurium, golds atomic number of 79 makes it one of the higher numbered, naturally occurring elements. It is thought to have produced in supernova nucleosynthesis, from the collision of neutron stars. Because the Earth was molten when it was formed, almost all of the present in the early Earth probably sank into the planetary core. Gold is resistant to most acids, though it does dissolve in aqua regia, a mixture of acid and hydrochloric acid. Gold also dissolves in solutions of cyanide, which are used in mining and electroplating. Gold dissolves in mercury, forming amalgam alloys, but this is not a chemical reaction, as a precious metal, gold has been used for coinage, jewelry, and other arts throughout recorded history. A total of 186,700 tonnes of gold is in existence above ground, the world consumption of new gold produced is about 50% in jewelry, 40% in investments, and 10% in industry. Gold is also used in infrared shielding, colored-glass production, gold leafing, certain gold salts are still used as anti-inflammatories in medicine. As of 2014, the worlds largest gold producer by far was China with 450 tonnes, Gold is cognate with similar words in many Germanic languages, deriving via Proto-Germanic *gulþą from Proto-Indo-European *ǵʰelh₃-. The symbol Au is from the Latin, aurum, the Latin word for gold, the Proto-Indo-European ancestor of aurum was *h₂é-h₂us-o-, meaning glow. This word is derived from the root as *h₂éu̯sōs, the ancestor of the Latin word Aurora. This etymological relationship is presumably behind the frequent claim in scientific publications that aurum meant shining dawn, Gold is the most malleable of all metals, a single gram can be beaten into a sheet of 1 square meter, and an avoirdupois ounce into 300 square feet. Gold leaf can be thin enough to become semi-transparent
13.
Silver
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Silver is a metallic element with symbol Ag and atomic number 47. The symbol Ag stems from Latin argentum, derived from the Greek ὰργὀς, a soft, white, lustrous transition metal, it exhibits the highest electrical conductivity, thermal conductivity, and reflectivity of any metal. The metal is found in the Earths crust in the pure, free form, as an alloy with gold and other metals. Most silver is produced as a byproduct of copper, gold, lead, Silver is more abundant than gold, but it is much less abundant as a native metal. Its purity is measured on a per mille basis, a 94%-pure alloy is described as 0.940 fine. As one of the seven metals of antiquity, silver has had a role in most human cultures. Silver has long valued as a precious metal. Silver metal is used in many premodern monetary systems in bullion coins, Silver is used in numerous applications other than currency, such as solar panels, water filtration, jewelry, ornaments, high-value tableware and utensils, and as an investment medium. Silver is used industrially in electrical contacts and conductors, in specialized mirrors, window coatings, Silver compounds are used in photographic film and X-rays. Dilute silver nitrate solutions and other compounds are used as disinfectants and microbiocides, added to bandages and wound-dressings, catheters. Silver is similar in its physical and chemical properties to its two neighbours in group 11 of the periodic table, copper and gold. This distinctive electron configuration, with an electron in the highest occupied s subshell over a filled d subshell. Silver is a soft, ductile and malleable transition metal. Silver crystallizes in a cubic lattice with bulk coordination number 12. Unlike metals with incomplete d-shells, metallic bonds in silver are lacking a covalent character and are relatively weak and this observation explains the low hardness and high ductility of single crystals of silver. Silver has a brilliant white metallic luster that can take a polish. Protected silver has greater optical reflectivity than aluminium at all wavelengths longer than ~450 nm, at wavelengths shorter than 450 nm, silvers reflectivity is inferior to that of aluminium and drops to zero near 310 nm. The electrical conductivity of silver is the greatest of all metals, greater even than copper, during World War II in the US,13540 tons of silver were used in electromagnets for enriching uranium, mainly because of the wartime shortage of copper
14.
Barter
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Barter is a system of exchange where goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. It is distinguishable from gift economies in many ways, one of them is that the exchange is immediate. It is usually bilateral, but may be multilateral and, in most developed countries, usually only exists parallel to monetary systems to a very limited extent. Barter, as a replacement for money as the method of exchange, is used in times of monetary crisis, examples include the Owenite socialists, the Cincinnati Time store, and more recently Ithaca HOURS and the LETS system. Adam Smith, the father of economics, sought to demonstrate that markets pre-existed the state. He argued that money was not the creation of governments, markets emerged, in his view, out of the division of labour, by which individuals began to specialize in specific crafts and hence had to depend on others for subsistence goods. These goods were first exchanged by barter, specialization depended on trade, but was hindered by the double coincidence of wants which barter requires, i. e. for the exchange to occur, each participant must want what the other has. To complete this hypothetical history, craftsmen would stockpile one particular good, be it salt or metal and this is the origin of money according to Smith. Money, as a universally desired medium of exchange, allows each half of the transaction to be separated, Barter is characterized in Adam Smiths The Wealth of Nations by a disparaging vocabulary, higgling, haggling, swapping, dickering. It has also characterized as negative reciprocity, or selfish profiteering. Anthropologists have argued, in contrast, that something resembling barter does occur in stateless societies it is almost always between strangers. Barter occurred between strangers, not fellow villagers, and hence cannot be used to explain the origin of money without the state. Since most people engaged in trade knew each other, exchange was fostered through the extension of credit, everyday exchange relations in such societies are characterized by generalized reciprocity, or a non-calculative familial communism where each takes according to their needs, and gives as they have. Barter is an option to those who cannot afford to store their small supply of wealth in money, the limitations of barter are often explained in terms of its inefficiencies in facilitating exchange in comparison to money. It is said that barter is inefficient because, There needs to be a coincidence of wants For barter to occur between two parties, both parties need to have what the other wants. Difficulty in storing wealth If a society relies exclusively on perishable goods, however, some barter economies rely on durable goods like pigs or cattle for this purpose. Other anthropologists have questioned whether barter is typically between total strangers, a form of known as silent trade. Silent trade, also called silent barter, dumb barter, or depot trade, is a method by which traders who cannot speak each language can trade without talking
15.
Coin
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A coin is a small, flat, round piece of metal or plastic used primarily as a medium of exchange or legal tender. They are standardized in weight, and produced in quantities at a mint in order to facilitate trade. They are most often issued by a government, Coins are usually metal or alloy, or sometimes made of synthetic materials. Coins made of metal are stored in large quantities as bullion coins. Other coins are used as money in transactions, circulating alongside banknotes. Usually the highest value coin in circulation is less than the lowest-value note. In the last hundred years, the value of circulation coins has occasionally been lower than the value of the metal they contain. Exceptions to the rule of face value being higher than content value also occur for some bullion coins made of copper, silver, or gold, while the Eagle, Maple Leaf, and Sovereign coins have nominal face values, the Krugerrand does not. The first coins were developed independently in Iron Age Anatolia and Archaic Greece, India, Coins spread rapidly in the 6th and 5th centuries BCE, throughout Greece and Persia, and further to the Balkans. Standardized Roman currency was used throughout the Roman Empire, important Roman gold and silver coins were continued into the Middle Ages. Fiat money first arose in medieval China, with the paper money. Early paper money was introduced in Europe in the later Middle Ages, the penny was minted as a silver coin until the 17th century. The first circulating United States coins were cents, produced in 1793, Coins were an evolution of currency systems of the Late Bronze Age, where standard-sized ingots, and tokens such as knife money, were used to store and transfer value. In the late Chinese Bronze Age, standardized cast tokens were made and these were replicas in bronze of earlier Chinese currency, cowrie shells, so they were named Bronze Shell. According to Aristotle and Pollux, the first issuer of coins was Hermodike of Kyme The earliest coins are associated with Iron Age Anatolia. Early electrum coins were not standardized in weight, and in their earliest stage may have been ritual objects, such as badges or medals, issued by priests. The first Lydian coins were made of electrum, a naturally occurring alloy of silver, most of the early Lydian coins include no writing, only an image of a symbolic animal. Anatolian Artemis was the Πὀτνια Θηρῶν, whose symbol was the stag, a small percentage of early Lydian/Greek coins have a legend
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Fiat money
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Fiat money is a currency established as money by government regulation or law. The term derives from the Latin fiat used in the sense of an order or decree and it differs from commodity money and representative money. The first use of money was recorded in China around 1000 AD. Since then, it has been used by countries, concurrently with commodity currencies. Fiat money has been defined variously as, Any money declared by a government to be legal tender, state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard. Intrinsically valueless money used as money because of government decree, a coin is fiat currency to the extent that its face value, value defined in law, is greater than its market value as metal. In monetary economics, fiat money is an intrinsically valueless object or record that is accepted as a means of payment. Circulating silver coins in the 1960s ceased to be produced containing the metal when the face value of the coin was below the cost of the elemental metal. The Coinage Act of 1965 eliminated silver from the circulating dimes and quarter dollars of the United States, the Canadian penny was mostly copper until 1996 and was removed from circulation in the fall of 2012 due to the cost of production relative to face value. In 2007 the Royal Canadian Mint produced a million dollar gold bullion coin, in 2015, the gold in the coins was worth more than 3.5 times the face value. Fiat money originated in 11th century China, and its use became widespread during the Yuan, the Song Dynasty in China was the first to issue paper money, jiaozi, around the 10th century AD. Although the notes were valued at an exchange rate for gold, silver, or silk. The government made attempts to support the paper by demanding taxes partly in currency and making other laws, but the damage had been done. The successive Yuan Dynasty was the first dynasty in China to use currency as the predominant circulating medium. The founder of the Yuan Dynasty, Kublai Khan, issued paper money known as Chao in his reign, the original notes during the Yuan Dynasty were restricted in area and duration as in the Song Dynasty. During the 13th century, Marco Polo described the money of the Yuan Dynasty in his book The Travels of Marco Polo. All these pieces of paper are issued with as much solemnity and authority as if they were of gold or silver. Tally sticks were employed as fiat currency in medieval England when, due to shortage, Henry I initiated their use by the Exchequer in or around 1100
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Currency
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A currency in the most specific use of the word refers to money in any form when in actual use or circulation as a medium of exchange, especially circulating banknotes and coins. A more general definition is that a currency is a system of money in common use, under this definition, US dollars, British pounds, Australian dollars, and European euros are examples of currency. These various currencies are recognized stores of value and are traded between nations in exchange markets, which determine the relative values of the different currencies. Currencies in this sense are defined by governments, and each type has limited boundaries of acceptance, other definitions of the term currency are discussed in their respective synonymous articles banknote, coin, and money. The latter definition, pertaining to the systems of nations, is the topic of this article. Currencies can be classified into two systems, fiat money and commodity money, depending on what guarantees the value. Some currencies are legal tender in certain jurisdictions, which means they cannot be refused as payment for debt. Others are simply traded for their economic value, digital currency has arisen with the popularity of computers and the Internet. Currency evolved from two basic innovations, both of which had occurred by 2000 BC, originally money was a form of receipt, representing grain stored in temple granaries in Sumer in ancient Mesopotamia, then Ancient Egypt. In this first stage of currency, metals were used as symbols to represent value stored in the form of commodities and this formed the basis of trade in the Fertile Crescent for over 1500 years. Trade could only reach as far as the credibility of that military and it is not known what was used as a currency for these exchanges, but it is thought that ox-hide shaped ingots of copper, produced in Cyprus, may have functioned as a currency. It is thought that the increase in piracy and raiding associated with the Bronze Age collapse, possibly produced by the Peoples of the Sea, brought the trading system of oxhide ingots to an end. In Africa, many forms of value store have been used, including beads, ingots, ivory, various forms of weapons, livestock, the manilla currency, the manilla rings of West Africa were one of the currencies used from the 15th century onwards to sell slaves. African currency is still notable for its variety, and in many various forms of barter still apply. These factors led to the metal itself being the store of value, first silver, now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and stamped into coins and this was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Coins could be counterfeited, but they created a new unit of account. Most major economies using coinage had several tiers of coins, using a mix of copper, silver, gold coins were used for large purchases, payment of the military and backing of state activities, they were more often used as measures of account than physical coins
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Fixed exchange-rate system
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There are benefits and risks to using a fixed exchange rate. In doing so, the rate between the currency and its peg does not change based on market conditions, the way floating currencies do. A fixed exchange-rate system can also be used as a means to control the behavior of a currency, however, in doing so, the pegged currency is then controlled by its reference value. In other words, a currency is dependent on its reference value to dictate how its current worth is defined at any given time. The central bank provides the assets and/or the foreign currency or currencies which are needed in order to any payments imbalances. In the 21st century, the associated with large economies typically do not fix or peg exchange rates to other currencies. The last large economy to use a fixed exchange system was the Peoples Republic of China which, in July 2005. The European Exchange Rate Mechanism is also used on a basis to establish a final conversion rate against the Euro from the local currencies of countries joining the Eurozone. The gold standard or gold standard of fixed exchange rates prevailed from about 1870 to 1914. The period between the two wars was transitory, with the Bretton Woods system emerging as the new fixed exchange rate regime in the aftermath of World War II. It was formed with an intent to rebuild war-ravaged nations after World War II through a series of currency stabilization programs, the early 1970s saw the breakdown of the system and its replacement by a mixture of fluctuating and fixed exchange rates. Timeline of the exchange rate system, The earliest establishment of a gold standard was in the United Kingdom in 1821 followed by Australia in 1852. Under this system, the value of all currencies was denominated in terms of gold with central banks ready to buy. Each central bank maintained gold reserves as their official reserve asset, for example, during the “classical” gold standard period, the U. S. dollar was defined as 0.048 troy oz. of pure gold. Following the Second World War, the Bretton Woods system replaced gold with the U. S. dollar as the reserve asset. The regime intended to combine binding legal obligations with multilateral decision-making through the International Monetary Fund, the rules of this system were set forth in the articles of agreement of the IMF and the International Bank for Reconstruction and Development. S. Dollar and to exchange rates within 1% of parity by intervening in their foreign exchange markets. In December 1971, the Smithsonian Agreement paved the way for the increase in the value of the price of gold from US$35.50 to US$38 an ounce
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Computer network
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A computer network or data network is a telecommunications network which allows nodes to share resources. In computer networks, networked computing devices exchange data with other using a data link. The connections between nodes are established using either cable media or wireless media, the best-known computer network is the Internet. Network computer devices that originate, route and terminate the data are called network nodes, nodes can include hosts such as personal computers, phones, servers as well as networking hardware. Two such devices can be said to be networked together when one device is able to exchange information with the other device, Computer networks differ in the transmission medium used to carry their signals, communications protocols to organize network traffic, the networks size, topology and organizational intent. In most cases, application-specific communications protocols are layered over other more general communications protocols and this formidable collection of information technology requires skilled network management to keep it all running reliably. The chronology of significant computer-network developments includes, In the late 1950s, in 1960, the commercial airline reservation system semi-automatic business research environment went online with two connected mainframes. Licklider developed a group he called the Intergalactic Computer Network. In 1964, researchers at Dartmouth College developed the Dartmouth Time Sharing System for distributed users of computer systems. The same year, at Massachusetts Institute of Technology, a group supported by General Electric and Bell Labs used a computer to route. Throughout the 1960s, Leonard Kleinrock, Paul Baran, and Donald Davies independently developed network systems that used packets to transfer information between computers over a network, in 1965, Thomas Marill and Lawrence G. Roberts created the first wide area network. This was an precursor to the ARPANET, of which Roberts became program manager. Also in 1965, Western Electric introduced the first widely used telephone switch that implemented true computer control, in 1972, commercial services using X.25 were deployed, and later used as an underlying infrastructure for expanding TCP/IP networks. In July 1976, Robert Metcalfe and David Boggs published their paper Ethernet, Distributed Packet Switching for Local Computer Networks, in 1979, Robert Metcalfe pursued making Ethernet an open standard. In 1976, John Murphy of Datapoint Corporation created ARCNET, a network first used to share storage devices. In 1995, the transmission speed capacity for Ethernet increased from 10 Mbit/s to 100 Mbit/s, by 1998, Ethernet supported transmission speeds of a Gigabit. Subsequently, higher speeds of up to 100 Gbit/s were added, the ability of Ethernet to scale easily is a contributing factor to its continued use. Providing access to information on shared storage devices is an important feature of many networks, a network allows sharing of files, data, and other types of information giving authorized users the ability to access information stored on other computers on the network
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Foreign exchange market
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The foreign exchange market is a global decentralized market for the trading of currencies. This includes all aspects of buying, selling and exchanging currencies at current or determined prices, in terms of trading volume, it is by far the largest market in the world, followed by the Credit market. The main participants in this market are the international banks. Financial centers around the function as anchors of trading between a wide range of multiple types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market does not determine the values of different currencies. The foreign exchange market works through financial institutions, and operates on several levels, behind the scenes, banks turn to a smaller number of financial firms known as dealers, who are actively involved in large quantities of foreign exchange trading. Most foreign exchange dealers are banks, so this behind-the-scenes market is called the interbank market. Trades between foreign exchange dealers can be large, involving hundreds of millions of dollars. Because of the sovereignty issue when involving two currencies, Forex has little supervisory entity regulating its actions, the foreign exchange market assists international trade and investments by enabling currency conversion. It also supports direct speculation and evaluation relative to the value of currencies, in a typical foreign exchange transaction, a party purchases some quantity of one currency by paying with some quantity of another currency. The modern foreign exchange market began forming during the 1970s. e, as such, it has been referred to as the market closest to the ideal of perfect competition, notwithstanding currency intervention by central banks.1 trillion per day in April 2016. This is down from $5.4 trillion in April 2013, Foreign exchange swaps were the most actively traded instruments in April 2016, at $2.4 trillion per day, followed by spot trading at $1.7 trillion. According to the Bank for International Settlements, as of April 2016 and this marks a decline of approximately 5% from the $5.355 trillion daily volume as of April 2013. Some firms specializing in the exchange market had put the average daily turnover in excess of US$4 trillion. Money-changers were living in the Holy Land in the times of the Talmudic writings and these people used city stalls, and at feast times the Temples Court of the Gentiles instead. Money-changers were also the silversmiths and/or goldsmiths of more recent ancient times, during the 4th century AD, the Byzantine government kept a monopoly on the exchange of currency. Papyri PCZ I59021, shows the occurrences of exchange of coinage in Ancient Egypt, Currency and exchange were important elements of trade in the ancient world, enabling people to buy and sell items like food, pottery and raw materials. If a Greek coin held more gold than an Egyptian coin due to its size or content, then a merchant could barter fewer Greek gold coins for more Egyptian ones, or for more material goods
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Speculation
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Speculation is the purchase of an asset with the hope that it will become more valuable at a future date. Many speculators pay little attention to the value of a security. Speculation can in principle involve any tradable good or financial instrument, Speculators are particularly common in the markets for stocks, bonds, commodity futures, currencies, fine art, collectibles, real estate, and derivatives. The number of shareholders increased, perhaps, from 4.4 million in 1900 to 26 million in 1932, the view of what distinguishes investment from speculation and speculation from excessive speculation varies widely among pundits, legislators and academics. Some sources note that speculation is simply a higher form of investment. Others define speculation more narrowly as positions not characterized as hedging, the agency emphasizes that speculators serve important market functions, but defines excessive speculation as harmful to the proper functioning of futures markets. According to Ben Graham in The Intelligent Investor, the prototypical defensive investor is. one interested chiefly in safety plus freedom from bother, Speculation is condemned on ethical-moral grounds as creating money from money and thereby promoting the vices of avarice and gambling. When a harvest is too small to satisfy consumption at its rate, speculators come in. Their purchases raise the price, thereby checking consumption so that the supply will last longer. Producers encouraged by the price further lessen the shortage by growing or importing to reduce the shortage. On the other side, when the price is higher than the speculators think the facts warrant and this reduces prices, encouraging consumption and exports and helping to reduce the surplus. If any market, such as pork bellies, had no speculators, with fewer players in the market, there would be a larger spread between the current bid and ask price of pork bellies. By contrast, a commodity speculator may profit the difference in the spread and, in competition with other speculators, some schools of thought argue that speculators increase the liquidity in a market, and therefore promote an efficient market. This efficiency is difficult to achieve without speculators, a very beneficial by-product of speculation for the economy is price discovery. On the other hand, as more speculators participate in a market, underlying real demand and supply can diminish compared to trading volume, Speculators also perform a very important risk bearing role that is beneficial to society. For example, a farmer might be considering planting corn on some unused farmland, however, he might not want to do so because he is concerned that the price might fall too far by harvest time. By selling his crop in advance at a price to a speculator, he is now able to hedge the price risk. Thus, speculators can actually increase production through their willingness to take on risk, hence, they make the prices better reflect the true quality of operation of the firms
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Purchasing
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Purchasing refers to a business or organization attempting to acquire goods or services to accomplish the goals of its enterprise. Though there are organizations that attempt to set standards in the purchasing process. Purchasing managers/directors, and procurement managers/directors guide the organization’s acquisition procedures, most organizations use a three-way check as the foundation of their purchasing programs. This involves three departments in the organization completing separate parts of the acquisition process, the three departments do not all report to the same senior manager, to prevent unethical practices and lend credibility to the process. These departments can be purchasing, receiving and accounts payable, or engineering, purchasing and accounts payable, or a plant manager, purchasing, combinations can vary significantly, but a purchasing department and accounts payable are usually two of the three departments involved. When the receiving department is not involved, it is called a two-way check or two-way purchase order. In this situation, the purchasing department issues the purchase order receipt not required, when an invoice arrives against the order, the accounts payable department will then go directly to the requestor of the purchase order to verify that the goods or services were received. This is typically what is done for goods and services that bypass the receiving department. A few examples are software delivered electronically, NRE work, consulting hours, historically, the purchasing department issued purchase orders for supplies, services, equipment, and raw materials. Then, in an effort to decrease the costs associated with the repetitive ordering of basic consumable items. These types of agreements typically have a duration and increased scope to maximize the quantities of scale concept. When additional supplies were required, a release would be issued to the supplier to provide the goods or services. Another method of decreasing administrative costs associated with repetitive contracts for common material, is the use of credit cards. P-card programs vary, but all of them have internal checks, Purchasing managers realized once contracts for the low dollar value consumables are in place, procurement can take a smaller role in the operation and use of the contracts. There is still oversight in the forms of audits and monthly statement reviews and these contracts are typically renewable annually. This trend away from the daily procurement function resulted in changes in the industry. The first was the reduction of personnel, there was no need for the army of clerks processing orders for individual parts as in the past. Another change was the focus on negotiating contracts and procurement of large capital equipment, both of these functions permitted purchasing departments to make the biggest financial contribution to the organization
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Loan
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In finance, a loan is the lending of money from one individual, organization or entity to another individual, organization or entity. A loan entails the reallocation of the asset for a period of time. The loan is provided at a cost, referred to as interest on the debt. In a legal loan, each of these obligations and restrictions is enforced by contract, although this article focuses on monetary loans, in practice any material object might be lent. Acting as a provider of loans is one of the tasks for financial institutions such as banks. For other institutions, issuing of debt such as bonds is a typical source of funding. A secured loan is a loan in which the borrower pledges some asset as collateral, a mortgage loan is a very common type of loan, used by many individuals to purchase things. In this arrangement, the money is used to purchase the property, the financial institution, however, is given security – a lien on the title to the house – until the mortgage is paid off in full. If the borrower defaults on the loan, the bank would have the right to repossess the house and sell it. In some instances, a loan out to purchase a new or used car may be secured by the car. The duration of the period is considerably shorter – often corresponding to the useful life of the car. There are two types of loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a consumer, an indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer. Unsecured loans are loans that are not secured against the borrowers assets. These may or may not be regulated by law, in the United Kingdom, when applied to individuals, these may come under the Consumer Credit Act 1974. Interest rates on unsecured loans are nearly always higher than for secured loans, an unsecured lender must sue the borrower, obtain a money judgment for breach of contract, and then pursue execution of the judgment against the borrowers unencumbered assets. In insolvency proceedings, secured lenders traditionally have priority over unsecured lenders when a court divides up the borrowers assets, thus, a higher interest rate reflects the additional risk that in the event of insolvency, the debt may be uncollectible. Demand loans are short term loans that are typically in that they do not have fixed dates for repayment and they can be called for repayment by the lending institution at any time
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Mortgage loan
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The loan is secured on the borrowers property. Mortgage can also be described as a borrower giving consideration in the form of a collateral for a benefit, Mortgage borrowers can be individuals mortgaging their home or they can be businesses mortgaging commercial property. Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, in many jurisdictions, it is normal for home purchases to be funded by a mortgage loan. Few individuals have enough savings or liquid funds to them to purchase property outright. In countries where the demand for ownership is highest, strong domestic markets for mortgages have developed. According to Anglo-American property law, a mortgage occurs when an owner pledges his or her interest as security or collateral for a loan. As with other types of loans, mortgages have an interest rate and are scheduled to amortize over a set period of time, typically 30 years. All types of property can be, and usually are, secured with a mortgage. Mortgage lending is the mechanism used in many countries to finance private ownership of residential and commercial property. Although the terminology and precise forms will differ from country to country, the components tend to be similar, Property. The exact form of ownership will vary from country to country, Mortgage, the security interest of the lender in the property, which may entail restrictions on the use or disposal of the property. Restrictions may include requirements to purchase insurance and mortgage insurance. Borrower, the person borrowing who either has or is creating an ownership interest in the property, lender, any lender, but usually a bank or other financial institution. Principal, the size of the loan, which may or may not include certain other costs, as any principal is repaid. Interest, a charge for use of the lenders money. Completion, legal completion of the deed, and hence the start of the mortgage. A closed mortgage account is said to be redeemed, many other specific characteristics are common to many markets, but the above are the essential features. Governments usually regulate many aspects of mortgage lending, either directly or indirectly, other aspects that define a specific mortgage market may be regional, historical, or driven by specific characteristics of the legal or financial system
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Credit card
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The card issuer creates a revolving account and grants a line of credit to the cardholder, from which the cardholder can borrow money for payment to a merchant or as a cash advance. A credit card is different from a card, where it requires the balance to be repaid in full each month. In contrast, credit cards allow the consumers a continuing balance of debt, a credit card also differs from a cash card, which can be used like currency by the owner of the card. Credit cards have a printed or embossed bank card number complying with the ISO/IEC7812 numbering standard, the card numbers prefix, called the Bank Identification Number, is the sequence of digits at the beginning of the number that determine the bank to which a credit card number belongs. This is the first six digits for MasterCard and Visa cards, the next nine digits are the individual account number, and the final digit is a validity check code. Both of these standards are maintained and further developed by ISO/IEC JTC 1/SC 17/WG1, Credit cards have a magnetic stripe conforming to the ISO/IEC7813. Many modern credit cards have a chip embedded in them as a security feature. In addition to the credit card number, credit cards also carry issue and expiration dates, as well as extra codes such as issue numbers. Not all credit cards have the sets of extra codes nor do they use the same number of digits. The concept of using a card for purchases was described in 1887 by Edward Bellamy in his utopian novel Looking Backward. Bellamy used the credit card eleven times in this novel, although this referred to a card for spending a citizens dividend from the government. Charge coins and other items were used from the late 19th century to the 1930s. They came in various shapes and sizes, with materials made out of celluloid, copper, aluminum, steel, each charge coin usually had a little hole, enabling it to be put in a key ring, like a key. These charge coins were given to customers who had charge accounts in department stores, hotels. A charge coin usually had the account number along with the merchants name. The charge coin offered a simple and fast way to copy a charge account number to the sales slip and this sped the process of copying, previously done by handwriting. It also reduced the number of errors, by having a form of numbers on the sales slip. Because the customers name was not on the coin, almost anyone could use it
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Debt
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Debt is money owed by one party, the borrower or debtor, to a second party, the lender or creditor. The borrower may be a state or country, local government, company. The lender may be a bank, credit card company, payday loan provider, Debt is generally subject to contractual terms regarding the amount and timing of repayments of principal and interest. Loans, bonds, notes, and mortgages are all types of debt, the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value. For example, in Western cultures, a person who has been helped by a person is sometimes said to owe a debt of gratitude to the second person. Interest is the fee paid by the borrower to the lender, interest is calculated as a percentage of the outstanding principal, which percentage is known as an interest rate, and is generally paid periodically at intervals, such as monthly or semi-annually. Interest rates may be fixed or floating, in floating-rate structures, the rate of interest that the borrower pays during each time period is tied to a benchmark such as LIBOR or, in the case of inflation-indexed bonds, inflation. There are many different conventions for calculating interest, depending on the terms of the debt, compound interest may accumulate at a specific interval. In addition, different day count conventions exist, for example, sometimes each month is considered to have thirty days. The annual percentage rate is a way to calculate and compare interest rates on an annual basis. Quoting interest rates using APR is required by regulation for most loans to individuals in the United States, for some loans, the amount actually loaned to the debtor is less than the principal sum to be repaid. This may be because upfront fees or points are charged, or because the loan has been structured to be sharia-compliant, the additional principal due at the end of the term has the same economic effect as a higher interest rate. This is sometimes referred to as a dozen, a play on bakers dozen – owe twelve, receive a loan of eleven. Amortization structures are common in mortgages and credit cards, debtors of every type default on their debt from time to time, with various consequences depending on the terms of the debt and the law governing default in the relevant jurisdiction. If the debt was secured by collateral, such as a car or home. In more serious circumstances, individuals and companies may go into bankruptcy, riskier borrowers must generally pay higher rates of interest to compensate lenders for taking on the additional risk of default. Debt investors assess the risk of default prior to making a loan, for example through credit scores and corporate, common types of debt owed by individuals and households include mortgage loans, car loans, and credit card debt. For individuals, debt is a means of using anticipated income, commonly, people in industrialized nations use consumer debt to purchase houses, cars and other things too expensive to buy with cash on hand
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Usury
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Usury is, as defined today, the practice of making unethical or immoral monetary loans that unfairly enrich the lender. Originally, usury meant interest of any kind, a loan may be considered usurious because of excessive or abusive interest rates or other factors. Historically in Christian societies, and still in many Islamic societies today, someone who practices usury can be called a usurer, but a more common term in contemporary English is loan shark. The term may be used in a moral sense—condemning, taking advantage of others misfortunes—or in a legal sense where interest rates may be regulated by law, historically, some cultures have regarded charging any interest for loans as sinful. Some of the earliest known condemnations of usury come from the Vedic texts of India, similar condemnations are found in religious texts from Buddhism, Judaism, Christianity, and Islam. At times, many nations from ancient China to ancient Greece to ancient Rome have outlawed loans with any interest, though the Roman Empire eventually allowed loans with carefully restricted interest rates, the Christian church in medieval Europe banned the charging of interest at any rate. Banking during Roman times was different from modern banking, during the Principate, most banking activities were conducted by private individuals, not by large banking firms like the ones that exist today. Since almost all moneylenders in the Empire were private individuals, anybody that had any additional capital and wished to lend it out could easily do so. The annual rates of interest on loans varied in the range of 4–12 percent, the apparent absence of intermediate rates suggests that the Romans may have had difficulty calculating the interest due on anything other than mathematically convenient rates. They quoted them on a basis, and the most common rates were multiples of twelve. Monthly rates tended to range from simple fractions to 3–4 percent, moneylending during this period was largely a matter of private loans advanced to persons short of cash, whether persistently in debt or temporarily until the next harvest. Mostly, it was undertaken by exceedingly rich men who were prepared to take on a risk if the profit looked good. Investment was always regarded as a matter of seeking personal profit, Banking was of the small, back-street variety, run by the urban lower-middle class of petty shopkeepers. By the 3rd century, acute currency problems in the Empire drove them into decline and it was evident that usury meant exploitation of the poor. The First Council of Nicaea, in 325, forbade clergy from engaging in usury, at the time, usury was interest of any kind, and the canon forbade the clergy to lend money at interest rates even as low as 1 percent per year. Later ecumenical councils applied this regulation to the laity, Lateran III decreed that persons who accepted interest on loans could receive neither the sacraments nor Christian burial. Pope Clement V made the belief in the right to usury a heresy in 1311, pope Sixtus V condemned the practice of charging interest as detestable to God and man, damned by the sacred canons and contrary to Christian charity. Theological historian John Noonan argues that the doctrine was enunciated by popes, certain negative historical renditions of usury carry with them social connotations of perceived unjust or discriminatory lending practices
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Receipt
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A receipt is a written acknowledgment that a person has received money or property in payment following a sale or other transfer of goods or provision of a service. Similarly, amounts may be deducted from amounts payable, as in the case of wage withholding taxes. On the other hand, tips or other gratuities given by a customer, for example in a restaurant, in some countries, it is obligatory for a business to provide a receipt to a customer confirming the details of a transaction. In most cases the recipient of money provides the receipt, but in cases the receipt is generated by the payer. A receipt is not the same as an invoice, there is usually no set form for a receipt, such as a requirement that it be machine generated. Many point-of-sale terminals or cash registers can automatically produce receipts, receipts may also be generated by accounting systems, be manually produced or generated electronically, for example if there is not a face-to-face transaction. To reduce the cost of postage and processing, many businesses do not mail receipts to customers, unless specifically requested or required by law, others, to reduce time and paper, may endorse an invoice, account or statement as Paid. The practice of presenting an invoice is most common in restaurants where a bill is presented after a meal, the salesperson would indicate to the customer the total amount payable, and the customer would indicate the proposed method of payment of the amount. Payment in cash or by payment is regarded as payment of the amount tendered, after processing the payment, the salesperson would then generate in the one document an invoice and receipt. If payment was made by a payment card, a payment record would also be generated. The invoice and receipt are the record of the transaction. A copy of these documents would normally be handed to the customer, the document may also include messages from the retailer, warranty or return details, special offers, advertisements or coupons, but these are merely promotional and not part of the formal receipt. Receipts may also be provided for operations such as banking transactions. If linked to a customer account, some retailers point-of-sale systems also allow the salesperson to see a complete record of the customers buying history. It can also be required when company representatives buy goods, because tax deduction rules might require hand signed receipts, organizing receipts and similar financial documents is a multimillion-dollar industry in the United States. Consumers can use desktop and online software to organize electronic receipts, sometimes, the growing trend of digital receipts has led to the launch of new businesses focused on digital receipt management. Cash register Depositary receipt Document automation in supply chain management & logistics Invoice List of finance topics Point of sales Proof of purchase Return receipt Electronic receipt
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Debit card
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A debit card is a plastic payment card that can be used instead of cash when making purchases. It is similar to a card, but unlike a credit card. Some cards may bear a stored value with which a payment is made, in some cases, the primary account number is assigned exclusively for use on the Internet and there is no physical card. In many countries, the use of cards has become so widespread that their volume has overtaken or entirely replaced cheques and, in some instances. The development of debit cards, unlike credit cards and charge cards, has generally been country specific resulting in a number of different systems around the world, which were often incompatible. Since the mid-2000s, a number of initiatives have allowed debit cards issued in one country to be used in countries and allowed their use for internet. Unlike credit and charge cards, payments using a card are immediately transferred from the cardholders designated bank account. Debit cards usually also allow for instant withdrawal of cash, acting as the ATM card for withdrawing cash, merchants may also offer cashback facilities to customers, where a customer can withdraw cash along with their purchase. There are currently three ways that debit card transactions are processed, EFTPOS, offline debit and the Electronic Purse Card System, One physical card can include the functions of all three types, so that it can be used in a number of different circumstances. Some debit cards are branded with the logo of the national card as well as Maestro. The use of a card system allows operators to package their product more effectively while monitoring customer spending. Online debit cards require electronic authorization of every transaction and the debits are reflected in the user’s account immediately, some on-line debit systems are using the normal authentication processes of Internet banking to provide real-time on-line debit transactions. Offline debit cards have the logos of major credit cards or major debit cards and are used at the point of sale like a credit card. This type of debit card may be subject to a daily limit, transactions conducted with offline debit cards require 2–3 days to be reflected on users’ account balances. Smart-card-based electronic purse systems are in use throughout Europe since the mid-1990s, most notably in Germany, Austria, in Austria and Germany, almost all current bank cards now include electronic purses, whereas the electronic purse has been recently phased out in the Netherlands. Those prepaid debit cards that can be reloaded are also called reloadable debit cards, the primary market for prepaid debit cards has traditionally been unbanked people, that is, people who do not use banks or credit unions for their financial transactions. But prepaid cards also appeal to other users attracted by their advantages, and if a user has doubts about online security, using a prepaid debit card for online purchases protects their normal credit card from risk. If the card provider offers a website for letting you check the cards balance
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Debit
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In double entry bookkeeping, debits and credits are entries made in account ledgers to record changes in value resulting from business transactions. Generally speaking, the account for the transaction is credited. Total debits must equal total credits for each transaction, individual transactions may require multiple debit and credit entries to record, the difference between the total debits and total credits in a single account is the accounts balance. If debits exceed credits, the account has a balance, if credits exceed debits. For the company as a whole, the totals of debit balances and credit balances must be equal as shown in the trial balance report, accountants use the trial balance to prepare financial statements which communicate information about the companys financial activities in a generally accepted standard format. The first known recorded use of the terms is Venetian Luca Paciolis 1494 work, Summa de Arithmetica, Geometria, Pacioli devoted one section of his book to documenting and describing the double-entry bookkeeping system in use during the Renaissance by Venetian merchants, traders and bankers. This system is still the system in use by modern bookkeepers. One theory is that in its original Latin, Paciolis Summa used the Latin words debere and credere to describe the two sides of a closed accounting transaction, Assets were owed to the owner and the owners equity was entrusted to the company. At the time numbers were not in use. When his work was translated, the Latin words debere and credere became the English debit and credit, under this theory, the abbreviations Dr and Cr derive from the original Latin. However, Sherman casts doubt on this idea because Pacioli uses Per for the debtor, the words actually used by Pacioli for the left and right sides of the Ledger are in dare and in havere. Jackson notes that debtor need not be a person, but can be an abstract operator. it became the practice to extend the meanings of the terms, beyond their original personal connotation and apply them to inanimate objects and abstract conceptions. Real accounts are the assets of a firm, which may be tangible or intangible Personal accounts relate to individuals, companies, creditors, nominal accounts relate to expenses, losses, incomes or gains. Whether a debit increases or decreases an account depends on what kind of account it is, an increase to an asset account is a debit. An increase to a liability or to an equity account is a credit, conversely, a decrease to an asset account is a credit. A decrease to a liability or equity account is a debit, debits and credits occur simultaneously in every financial transaction in double-entry bookkeeping. In the accounting equation—Assets = Liabilities + Equity—if an asset account increases, then either another asset account must decrease, for example, when the customer of a bank deposits money into his bank account two things change, the customers cash-in-hand decreases and the customers bank account balance increases. The decrease in the asset is a credit while the increase in the bank account balance is a debit of equal magnitude
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Credit card fraud
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Credit card fraud is a wide-ranging term for theft and fraud committed using or involving a payment card, such as a credit card or debit card, as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account, Credit card fraud is also an adjunct to identity theft. According to the United States Federal Trade Commission, while the rate of identity theft had been holding steady during the mid 2000s, it increased by 21 percent in 2008. However, credit card fraud, that crime which most people associate with ID theft, although incidence of credit card fraud is limited to about 0. 1% of all card transactions, this has resulted in huge financial losses as the fraudulent transactions have been large value transactions. In 1999, out of 12 billion transactions made annually, approximately 10 million—or one out of every 1200 transactions—turned out to be fraudulent, also,0. 04% of all monthly active accounts were fraudulent. Todays fraud detection systems are designed to prevent one twelfth of one percent of all transactions processed which still translates into billions of dollars in losses, in the decade to 2008, general credit card losses have been 7 basis points or lower. In 2007, fraud in the United Kingdom was estimated at £535 million, the compromise can occur by many common routes and can usually be conducted without tipping off the card holder, the merchant, or the issuer at least until the account is ultimately used for fraud. A simple example is that of a store clerk copying sales receipts for later use, the rapid growth of credit card use on the Internet has made database security lapses particularly costly, in some cases, millions of accounts have been compromised. The cardholder may not discover fraudulent use until receiving a billing statement, cardholders can mitigate this fraud risk by checking their account frequently to ensure constant awareness in case there are any suspicious, unknown transactions or activities. When a credit card is lost or stolen, it may be used for illegal purchases until the holder notifies the issuing bank, most banks have free 24-hour telephone numbers to encourage prompt reporting. Still, it is possible for a thief to make unauthorized purchases on a card before the card is cancelled, the only common security measure on all cards is a signature panel, but, depending on its exact design, a signature may be relatively easy to forge. Some merchants will demand to see a picture ID, such as a license, to verify the identity of the purchaser. In some jurisdictions, it is illegal for merchants to demand card holder identification, self-serve payment systems are common targets for stolen cards, as there is no way to verify the card holders identity. There is also a new law that has been implemented that identification or a signature is required for purchases above $50. A common countermeasure is to require the user to key in some identifying information, such as the users ZIP or postal code. This method may deter casual theft of a card found alone, for instance, a U. S. driver license commonly has the holders home address and ZIP code printed on it. Visa Inc. offers merchants lower rates on transactions if the customer provides a ZIP code, in Europe, most cards are equipped with an EMV chip which requires a 4 to 6 digit PIN to be entered into the merchants terminal before payment will be authorised. However, a PIN isnt required for transactions, and is often not required for transactions using the magnetic strip
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Financial transaction tax
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A financial transaction tax is a levy placed on a specific type of monetary transaction for a particular purpose. The concept has been most commonly associated with the financial sector, a transaction tax is not a levy on financial institutions per se, rather, it is charged only on the specific transactions that are designated as taxable. So if an institution never carries out the transaction, then it will never be subject to the transaction tax. Furthermore, if an institution carries out one such transaction. As such, this tax is neither a financial activities tax, nor a Financial stability contribution, or Bank tax and this clarification is important in discussions about using a financial transaction tax as a tool to selectively discourage excessive speculation without discouraging any other activity. There are several types of financial transaction taxes, some have been implemented, while some are only proposals. Concepts are found in organizations and regions around the world. Some are domestic and meant to be used within one nation, in 2011 there were 40 countries that made use of FTT, together raising $38 billion. The year 1694 saw an early implementation of a transaction tax in the form of a stamp duty at the London Stock Exchange. The tax was payable by the buyer of shares for the stamp on the legal document needed to formalize the purchase. As of 2011, it is the oldest tax still in existence in Great Britain, the United States instituted a transfer tax on all sales or transfers of stock in The Revenue Act of 1914. Instead of a tax amount per transaction, the tax was in the amount of 0. 2% of the transaction value. This was doubled to 0. 4% in 1932, in the context of the Great Depression, in 1936, in the wake of the Great Depression, John Maynard Keynes advocated the wider use of financial transaction taxes. He proposed the levying of a transaction tax on dealings on Wall Street, in the United States. In 1972 the Bretton Woods system for stabilizing currencies effectively came to an end, in that context, James Tobin, influenced by the work of Keynes, suggested his more specific currency transaction tax for stabilizing currencies on a larger global scale. As the EU, European free trade and Euro came together, one non-tax regulatory equivalent of Tobins narrow tax, to require non-interest bearing deposit requirements on all open foreign exchange positions, was considered in particularly but rejected. Economic literature of the period 1990s-2000s emphasized that derivatives and other variations in the terms of payment in trade-related transactions provided a means of evading any tax. Other measures and exemptions from such taxes, to avoid punishing hedging were also proposed
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International Standard Book Number
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The International Standard Book Number is a unique numeric commercial book identifier. An ISBN is assigned to each edition and variation of a book, for example, an e-book, a paperback and a hardcover edition of the same book would each have a different ISBN. The ISBN is 13 digits long if assigned on or after 1 January 2007, the method of assigning an ISBN is nation-based and varies from country to country, often depending on how large the publishing industry is within a country. The initial ISBN configuration of recognition was generated in 1967 based upon the 9-digit Standard Book Numbering created in 1966, the 10-digit ISBN format was developed by the International Organization for Standardization and was published in 1970 as international standard ISO2108. Occasionally, a book may appear without a printed ISBN if it is printed privately or the author does not follow the usual ISBN procedure, however, this can be rectified later. Another identifier, the International Standard Serial Number, identifies periodical publications such as magazines, the ISBN configuration of recognition was generated in 1967 in the United Kingdom by David Whitaker and in 1968 in the US by Emery Koltay. The 10-digit ISBN format was developed by the International Organization for Standardization and was published in 1970 as international standard ISO2108, the United Kingdom continued to use the 9-digit SBN code until 1974. The ISO on-line facility only refers back to 1978, an SBN may be converted to an ISBN by prefixing the digit 0. For example, the edition of Mr. J. G. Reeder Returns, published by Hodder in 1965, has SBN340013818 -340 indicating the publisher,01381 their serial number. This can be converted to ISBN 0-340-01381-8, the check digit does not need to be re-calculated, since 1 January 2007, ISBNs have contained 13 digits, a format that is compatible with Bookland European Article Number EAN-13s. An ISBN is assigned to each edition and variation of a book, for example, an ebook, a paperback, and a hardcover edition of the same book would each have a different ISBN. The ISBN is 13 digits long if assigned on or after 1 January 2007, a 13-digit ISBN can be separated into its parts, and when this is done it is customary to separate the parts with hyphens or spaces. Separating the parts of a 10-digit ISBN is also done with either hyphens or spaces, figuring out how to correctly separate a given ISBN number is complicated, because most of the parts do not use a fixed number of digits. ISBN issuance is country-specific, in that ISBNs are issued by the ISBN registration agency that is responsible for country or territory regardless of the publication language. Some ISBN registration agencies are based in national libraries or within ministries of culture, in other cases, the ISBN registration service is provided by organisations such as bibliographic data providers that are not government funded. In Canada, ISBNs are issued at no cost with the purpose of encouraging Canadian culture. In the United Kingdom, United States, and some countries, where the service is provided by non-government-funded organisations. Australia, ISBNs are issued by the library services agency Thorpe-Bowker
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