Post on 19-Jun-2015
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2. Balance sheet Liabilities Capital=1000 Loan=0 Total=1000 Assets Projects= 0 E-Currency=1000 Total=1000 Balance sheet Liabilities Capital=1000 Assets E-Currency=1000 Balance =1000 Balance sheet Liabilities Capital=1000 Assets E-Currency=1000 Balance sheet Liabilities Capital=1000 Loan=0 Total=1000 Assets Projects= 0 E-Currency=1000 Total=1000 ECONOMY Balance sheet LIABILITIES CapitalRs. 4,000.00 Bank Deposits Rs.4,000.00 LoansRs. 0 TOTAL Rs.8,000.00 ASSETS E-Currency (i) with bankRs. 4,000.00 (ii) with others Rs. 4,000.00 ProjectsRs 0Loans & AdvRs 0 TOTALRs. 8,000.00 Bank Balance sheet Liablilities Capital=0 Deposits C1=1000 C2=1000 G=1000 E=1000=4000 Total=4000 Assets Loans & adv=0 E-Currency=4000 Total=4000 C1 C2 G E Initial Money introduced Balance =1000 Balance =1000 Balance =1000 3. Balance sheet Liabilities Capital=500 Assets E-Currency=500 Balance=500 Balance sheet Liabilities Capital=1500 Assets E-Currency=1500 Balance=1500 C1 C2 Rs. 500.00 Since the money at any point of time is both with the bank & the citizens, therefore there can never be any liquidity crunchBalance sheet Liabilities Capital=1000 Loan=0 Total=1000 Assets Projects= 0 E-Currency=1000 Total=1000 Balance sheet Liabilities Capital=1000 Loan=0 Total=1000 Assets Projects= 0 E-Currency=1000 Total=1000 G E Balance =1000 Balance =1000 ECONOMY Balance sheet LIABILITIES CapitalRs. 4,000.00 Bank Deposits Rs.4,000.00 LoansRs. 0 TOTAL Rs.8,000.00 ASSETS E-Currency (i) with bankRs. 4,000.00 (ii) with others Rs. 4,000.00 ProjectsRs 0Loans & AdvRs 0 TOTALRs. 8,000.00 Bank Balance sheet Liablilities Capital=0 Deposits C1=500 C2=1500 G=1000 E=1000=4000 Total=4000 Assets Loans & adv=0 E-Currency=4000 Total=4000 4. Loan Rs 2000. Debt-financing technique gets initiated here Balance sheet Liabilities Capital=500 Assets E-Currency=500 Balance=500 Balance sheet Liabilities Capital=1500 Assets E-Currency=1500 Balance=1500 C1 C2 Balance sheet Liabilities Capital=1000 Loan=0 Total=1000 Assets Projects= 0 E-Currency=1000 Total=1000 E Balance =1000 Balance sheet Liabilities Capital=1000 Loan=2000 Total=3000 Assets Projects= 0 E-Currency=3000 Total=3000 G Balance =1000 Bank Balance sheet Liablilities Capital=0 Deposits C1=500 C2=1500 G=3000 E=1000=6000 Total=6000 Assets Loans & adv=2000 E-Currency=4000 Total=6000 ECONOMY Balance sheet LIABILITIES CapitalRs. 4,000.00 Bank Deposits Rs.6,000.00 LoansRs. 2,000.00 TOTAL Rs.12,000.00 ASSETS E-Currency (i) with bankRs. 4,000.00 (ii) with others Rs. 6,000.00 ProjectsRs 0Loans & AdvRs 2000.00 TOTALRs. 12,000.00 5. Loan Rs 2000. Balance sheet Liabilities Capital=500 Assets E-Currency=500 Balance=500 Balance sheet Liabilities Capital=1500 Assets E-Currency=1500 Balance=1500 C1 C2 Balance sheet Liabilities Capital=1000 Loan=2000 Total=3000 Assets Projects= 0 E-Currency=3000 Total=3000 E Balance =3000 Balance sheet Liabilities Capital=1000 Loan=2000 Total=3000 Assets Projects= 0 E-Currency=3000 Total=3000 G Balance =3000 Bank Balance sheet Liablilities Capital=0 Deposits C1=500 C2=1500 G=3000 E=3000=8000 Total=8000 Assets Loans & adv=4000 E-Currency=4000 Total=8000 ECONOMY Balance sheet LIABILITIES CapitalRs. 4,000.00 Bank Deposits Rs.8,000.00 LoansRs. 4,000.00 TOTAL Rs.16,000.00 ASSETS E-Currency (i) with bankRs. 4,000.00 (ii) with others Rs. 8,000.00 ProjectsRs 0Loans & AdvRs 4000.00 TOTALRs. 16,000.00 6. Rewards 2000.00 System created Money = (E-currency in hand with others) (Initialmoney introduced) = Rs 8000-4000 =Rs 4000.00 Real wealthbeing created here Thus the first income cycle is created Balance sheet Liabilities Capital=500 Assets E-Currency=500 Balance=500 Balance sheet Liabilities Capital=3500 Assets E-Currency=3500 Balance=3500 C1 C2 Balance sheet Liabilities Capital=1000 Loan=2000 Total=3000 Assets Projects= 0 E-Currency=3000 Total=3000 E Balance =3000 Balance sheet Liabilities Capital=1000 Loan=2000 Total=3000 Assets Projects=2000 E-Currency=1000 Total=3000 G Balance =1000 Bank Balance sheet Liablilities Capital=0 Deposits C1=500 C2=3500 G=1000 E=3000=8000 Total=8000 Assets Loans & adv=4000 E-Currency=4000 Total=8000 ECONOMY Balance sheet LIABILITIES CapitalRs. 6,000.00 Bank Deposits Rs.8,000.00 LoansRs. 4,000.00 TOTAL Rs.18,000.00 ASSETS E-Currency (i) with bankRs. 4,000.00 (ii) with others Rs. 8,000.00 ProjectsRs 2000.00Loans & AdvRs 4000.00 TOTALRs. 18,000.00 7. Rewards Rs 2000.00 Balance sheet Liabilities Capital=2500 Assets E-Currency=2500 Balance=2500 Balance sheet Liabilities Capital=3500 Assets E-Currency=3500 Balance=3500 C1 Balance sheet Liabilities Capital=1000 Loan=2000 Total=3000 Assets Projects=2000 E-Currency=1000 Total=3000 E Balance =1000 Balance sheet Liabilities Capital=1000 Loan=2000 Total=3000 Assets Projects=2000 E-Currency=1000 Total=3000 G Balance =1000 C2 Bank Balance sheet Liablilities Capital=0 Deposits C1=2500 C2=3500 G=1000 E=1000=8000 Total=8000 Assets Loans & adv=4000 E-Currency=4000 Total=8000 ECONOMY Balance sheet LIABILITIES CapitalRs. 8,000.00 Bank Deposits Rs.8,000.00 LoansRs. 4,000.00 TOTAL Rs.20,000.00 ASSETS E-Currency (i) with bankRs. 4,000.00 (ii) with others Rs. 8,000.00 ProjectsRs 4000.00Loans & AdvRs 4000.00 TOTALRs. 20,000.00 (Money deposited with the bank) =1 (Money in circulation) Hence, the intrinsic value of money remains at par all the time. As a consequence, the question of Monetary Inflation does NOT arise at all. 8. Loan Rs 1500.00 Loan Rs 2500.00 System created Money = (E-currency in hand with others) (Initialmoney introduced) = Rs (12000-4000) =Rs 8000.00 Balance sheet Liabilities Capital=2500 Assets E-Currency=2500 Balance=2500 Balance sheet Liabilities Capital=3500 Assets E-Currency=3500 Balance=3500 C1 Balance sheet Liabilities Capital=1000 Loan=4500 Total=5500 Assets Projects=2000 E-Currency=3500 Total=5500 E Balance =3500 Balance sheet Liabilities Capital=1000 Loan=3500 Total=4500 Assets Projects=2000 E-Currency=2500 Total=4500 G Balance =2500 C2 Bank Balance sheet Liablilities Capital=0 Deposits C1=2500 C2=3500 G=2500 E=3500=12000 Total=12000 Assets Loans & adv=8000 E-Currency=4000 Total=12000 ECONOMY Balance sheet LIABILITIES CapitalRs. 8,000.00 Bank Deposits Rs.12,000.00 LoansRs. 8,000.00 TOTAL Rs.28,000.00 ASSETS E-Currency (i) with bankRs. 4,000.00 (ii) with others Rs. 12,000.00 ProjectsRs 4000.00Loans & AdvRs 8000.00 TOTALRs. 28,000.00 9. Remun Rs 2000.00 Real wealth gets increased Thus the second income cycle is created Balance sheet Liabilities Capital=3700 Assets E-Currency=3700 Balance=3700 Balance sheet Liabilities Capital=5500 Assets E-Currency=5500 Balance=5500 C1 Balance sheet Liabilities Capital=1000 Loan=4500 Total=5500 Assets Projects=4000 E-Currency=1500 Total=5500 E Balance =1500 Balance sheet Liabilities Capital=1000 Loan=3500 Total=4500 Assets Projects=3200 E-Currency=1300 Total=4500 G Balance =1300 C2 Rs 1200.00 Bank Balance sheet Liablilities Capital=0 Deposits C1=3700 C2=5500 G=1300 E=1500=12000 Total=12000 Assets Loans & adv=8000 E-Currency=4000 Total=12000 ECONOMY Balance sheet LIABILITIES CapitalRs. 11,200.00 Bank Deposits Rs.12,000.00 LoansRs. 8,000.00 TOTAL Rs.31,200.00 ASSETS E-Currency (i) with bankRs. 4,000.00 (ii) with others Rs. 12,000.00 ProjectsRs 7200.00Loans & AdvRs 8000.00 TOTALRs. 31,200.00 10. To summarize
11. To summarize(contd.)