What The Money is Saying. Money. Why do people talk about it so much? If you display a lot of it what does it say about you? When Davido sings about The Money, along with Olamide, he just wants the money because it makes people think you have a lot of honey and you might just share it with them. Now Davido in this video is actually teaching a small course in economics by indirectly suggesting the value function of money and using that to illustrate the importance of money. To economists, there are three main functions of money. 1. Money is primarily a medium of exchange so that it can be used to facilitate transactions. 2. Money can serve as a unit of account so as to have a common measure of the value of goods and services exchanged. Then 3. Money can be a store of value. In order to be a medium of exchange, money must hold its value over time. However, money is more liquid than most other stores of value and so it is readily accepted everywhere. So people like Davido and Olamide know that their cherished clients will want it. Why do people want money? Well for what it will buy today or tomorrow. People value any given amount today than they would tomorrow because inflation tends to diminish the value of money, except when the money is invested and the real interest rate is positive. So people want to associate with someone who has a lot of money today. But in all this, that money must have a lot of value. The money must be able to hold its value. If that money is believed to be able to hold its value and if you can show your client that you have plenty of it, then since it is a store of value it probably means you have a lot more wealth and value from where this money came from. Which means you must be important. And so to your clients this cash may only represent the tip of the iceberg for you. Therefore, they will feel very lucky to have met you. Our hidden economics for you.
Posted: Jul 27th, 2016 @ 03:52:34 AM