4QQMN147: SOCIAL SCIENCE AND MODERN BUSINESS II
Topic 2 Tutorial Questions
Students should complete the readings for Topic 2: Money and prepare short answers to each of the following questions. Each question can be answered in a single paragraph. Students should submit their answers in a word document at the “Topic 2 Tutorial Submission” link on the Keats page.
What are the nominal features of money according to the positioning theory of money?
The two nominal features of money according to the positioning theory of money is first of all it holds the power to be utilised throughout a community as a method of payment. This can be explained through the position constitution which brings into being rights and obligations as money has the ability to settle any debt.
Secondly the next nominal property of money according to the positioning theory of money is that when successful, money holds purchasing power. The condition is Whenever someone accepts payment of money than they can pass it on to others without a significant loss in value.
How does Tony Lawson distinguish between payment value and use value?
It is said to have value because it is useful (in directly meeting needs and wants) we can refer to it as use-value. Lawson states that, currently, in countries like the UK, money takes the form of positioned (commercial or central) bank debt (which can be interpreted as an enduring promise to pay). And it requires markers such as cash and electronic representations. But bank debt is money, not the markers.
What significance do legal tender laws have for an understanding of the nature of money?
Legal tender laws prevent the use of anything other than the existing legal tender as money in the economy. Legal tender serves the economic functions of money plus a few additional functions, such as making monetary policy and currency manipulation possible.
If we are to have a successful money in a community, what condition needs to be satisfied?
Community members must trust that the positioned item will maintain its value over time and be easy to transfer to others, to swap/exchange for other things without apparent loss of value. For money to be successfully constituted community members trust that the thing positioned as money will be a reliable store of liquid value.
What is currently positioned as money in the UK?
Currently in the UK money is positioned as a form of bank debt which holds value as a reliable store of liquid value.
What is the difference between money and cash?
Cash is a material/physical note. But this is not the case for money, rather a depiction of a specific debt relationship. Money refers to anything positioned as a trusted liquid store that allows payment or to discharge debt.