Exercise 2-1 Describe at least three ways you could pay for your morning cup of coffee

Exercise 2.1
1.Cash payment: Through this method of payment transaction can be closed very easily and takes only less time which is a major advantage of cash transaction. The main disadvantage of this payment is that one has to carry cash in his hands.
2.Credit or debit card payment: the credit card or debit card purchases is free from transactional cost. The main disadvantage of this payment is that these services may not be available in small shopes or villages as they maynot have the financial stability to own a point of service machine.
3.Cheque payment: It is a very conveinent and easy method of payment which serves as a main advantage whereas the disadvantage of this payment system is that the bearer has to carry out a time taking process in bank to get the cash.
Excersise 2.2
Cash payment is less costly for me as it serves the easiest method of payment mechanism. Eventhough other methods are conveinent they also posess some disadvantages. others are more costly as one has to go through several procedures which takes more time to complete a transation.
Excersise 2.3
Money replaced the barter system which is a major specialization that improved the standard of living. Earlier people were paid some commodities as their wages. They had no cash or money instead they had commodities of food that helped them to live without proverty. This never helped them to leave in a better standardisation.
Money relaced this hindrence. later on people used money as the payment system which helped them to improve their leving standards. people were given cash as payment or wages which made them to live in a better economy and this stregthened the economy which serves a major importance.
Excersise 2.4
Examples of ACH are:
1. A customer paying a service provider
2.Employer depositing money into their employees checking account
3. Customer moving funds from one bank to another
4. bussinesses paying suppliers for products
Excersise 2.5
Yes, The dollor can still serve as the unit of account even its not used as a means of payment.dollors and cents are still used as standard measurement of value.
Excersise 2.6
The adopting countries has the same unit of account which serves as a common advantage of adopting common currency. This maes easier to compare prises in differnt countries.Each countries has same unit of account for making the traveller easier to compare prises in differnt countries.
Excersise 2.7
The above commodities like tomatoes, bricks and cattles cannot be treated as a money as the value of these commodities cannot be measured as compared to cash. Tomatoes are perishable goods which cannot be used as a payment mechanism or as money. Bricks can either be used as a cash or a payment method as it can also be perished or broken while transporting or it might cause damage while handling or transmitting. cattles are also not advicable as it has a life which can be lost at any time which might result in fights or other isuues.
Excersise 2.8
People will be unwilling to accept bills as payment and may require payment through cheques, debit or credit cards or any other electronic transactions. This could result in inflation in the currency.
Excersise 2.9
a. Barter may remerge if there is a period of high inflation or trust in fiot money as also if the inflation is low and stable and people don't belive that fiat money has must value. these cases might cause the barter system to remerge.
Excersie 2.10
Money can be defied as anything that can be accepted as a means of payment. is a store of value.cash in pocket is treated as cash in hand. To avoid confusions, economist has defined money in concept of liquidity.They use 2 definisions of supply of money.M1 and M2. M1 includes those assets which are in liquid means like cash, cheque and so on. M2 includes M1 and some less liqid assets which includes savings, deposites and so on.