Modern world is moving with the wheel of money. Money is not only important in every aspect of human life; it is also evil. Money is a good servant but bad master. Hence it is referred as necessary evil. The main defects are as follows.
1. ECONOMICS INSTABILITY
The value or purchasing power of money doesn’t remain same. This fluctuation in value of money causes economic instability. Increasing in quantity of money reduce value of money and invite inflation which makes the reach richer and the poor poorer. On the other hands decrease in the quantity of money increase value of money and causes deflection which increase unemployment and hardship.
2. TRADE CYCLE
Money can cause Boom and Slump. During boom employment expand beyond full employment level and price goes very high. During slump unemployment increase and productivity capacity and investment deceases. This trade cycle is monetary phenomena i.e. causes by money.
3. INEQUALITY OF INCOME AND WEALTH
Money cause inequality in the distribution of income and wealth which divide the society into richer and poor and causes class conflict. It disturbed the social harmony.
4. DISCOURAGE CAPITAL FORMULATION
Money discourages the capital formulation because if there is inflection, money gives rich to speculative activity and attracts resources away from productivity channels. On the other hand, if there is deflection, the whole economy machine goes out of gear and spreads missing all rounds.
5. SOCIAL DISADVANTAGE
Money brings about social disadvantage. It has been responsible for decline of spiritualism, increasing greed, encouraging theft, robbery, prostitution etc. it also increases exploitation and large scale corruption in the modern society.
1. ECONOMICS INSTABILITY
The value or purchasing power of money doesn’t remain same. This fluctuation in value of money causes economic instability. Increasing in quantity of money reduce value of money and invite inflation which makes the reach richer and the poor poorer. On the other hands decrease in the quantity of money increase value of money and causes deflection which increase unemployment and hardship.
2. TRADE CYCLE
Money can cause Boom and Slump. During boom employment expand beyond full employment level and price goes very high. During slump unemployment increase and productivity capacity and investment deceases. This trade cycle is monetary phenomena i.e. causes by money.
3. INEQUALITY OF INCOME AND WEALTH
Money cause inequality in the distribution of income and wealth which divide the society into richer and poor and causes class conflict. It disturbed the social harmony.
4. DISCOURAGE CAPITAL FORMULATION
Money discourages the capital formulation because if there is inflection, money gives rich to speculative activity and attracts resources away from productivity channels. On the other hand, if there is deflection, the whole economy machine goes out of gear and spreads missing all rounds.
5. SOCIAL DISADVANTAGE
Money brings about social disadvantage. It has been responsible for decline of spiritualism, increasing greed, encouraging theft, robbery, prostitution etc. it also increases exploitation and large scale corruption in the modern society.
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