Economics essays

Economics essays In the beginning there was barter, (1) ...people learning to trade the things they had for the things they wanted. What sparked this form of trading was the fact that our earliest ancestors were self-sufficient. Occasionally there were surpluses of one commodity or another, this is how barter flourished, and the most famous example of barter was in 1626 when Peter Minuit traded twenty-four dollars for the island of Manhattan, which in 1998 was assessed at $23.4 billion. As trade became the norm, money came into use. When buyer and sellers agreed on what was acceptable payment, they then could establish a system that assigned different values to coins or other durable and easily transportable items. As early as 2500 B.C. various precious metals such as gold, sliver, and copper were used to pay for goods and services in Egypt and Asia Minor. Now days, a money cycle has been created in America to take old money out of circulation and replaced on a regular basis. The money cycle is run this way: first the Treasury ships new money to the Federal Reserve Banks, then the Federal Reserve Banks and branches distribute the new money to individual banks in their region, once it arrives there the individual banks distributes the money to their customers, including businesses and individuals. The reverse cycle is as follows: the money circulates through the economy, the money is then deposited into banks after it changes hands many times in many countries, from there the banks separate the worn bills and coins and ship them back to their individual Fed branch or bank, then the Fed banks return the old money to the Treasury to be shredded and burned into mulch. The next topic to be discussed was the Federal Reserve System. Described as, (2)...the guardian of the nations money- banker, regulator, controller, and watchdog all rolled into one. As a regulator the Fed authorizes the buying and sell...