Role Of Money In Argentina

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How Money is measured in Argentina

Introduction What is money? “Money is a means of payment, store of value and unit of account” (eds Dawson and Mackintosh 2004). There are various ways in which the value of money is measured in different countries and in Argentina. The most widely applied model of measuring money is the M1, M2 and M3, and these variables are known as the money aggregates (Beck & Wieland, 2008, p. 89). Money supply in Argentina reflects M1 refers to the Argentine Peso in notes and coins in the circulation and other equivalent money that easily convert into cash. M2 is defined as short term time deposits that are done in the Argentinean commercial banks and deposit taking institutions within 24 hours plus M1. M3 includes
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Production of consumption products will also reduce to a greater extent. Money, on the other hand, will constantly be following out of the firms due to hiring of production factors. The firms will then inject the acquired income into savings.

Role of fiat money
Fiat money is a type of currency that is issued through official order whereby the value is subjected from the issuing authority. It is done through granting in paying certain stated or face amount and not through the intrinsic worth or baking (Laidler & Canada, 1999, p. 352). Therefore, all the currencies at national level and in circulation, issues and managed by central bank of Argentina are referred as the fiat currency at Argentina boundaries.
In my opinion, fiat money should not be abolished. In the case that the government abolishes fiat money to apply the commodity money, it would lead to an increase in the inflation level (Laidler & Canada 1999, p. 655). The cost of acquiring the metals for the manufacture of coin money would increase due to an increase in the demand.

Role of money
a) Mode of payment- people use money while exchanging the products. Money is the medium of exchange and hence applied in transaction and currency
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This then entails the Central Bank of Argentina to increase interest rates (Laidler & Canada, 1999, p. 231). This makes the other banks increase them too. It then discourages the consumers from borrowing loans. Rate of spending declines and hence the levels of inflation are reduced to minimal ones.
Concerning graph, the data is obtained from various years from 2000 to 2010 measuring currency circulation. The factors in consideration are directed from the amount of the money in the traders hand for ten years period. According to the graph, there is reduction of circulation of money due to application of credit cards and money transfer technology.

Conclusion
Central Bank of Argentina is the backbone of any country’s economy through policy making regarding money supply or demand. It is essential noting that, the factor regarding economic development is directed through the Central Bank of Argentina. Argentina sets appropriate measures regarding the money that have enhanced development. The money is directed in achievement of set functions that are applied in the region. Finally, the currency exchanges in the region are based on the development as well as demand and supply. This affected the interest rate, exchange rate and

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