Money is a legal tender, right now there is no money iko wapi ?
If all of us don’t have money ? Where is that cash that flows from one hand to the other, from msee wa mutura to msee wa hardware , from dereva wa Ma3 to Askari was barabara, from mkulima was maziwa to the cooperative society …
Ile kitu sielewi Ni wapi pesa iko ? Accounts in the banks are running dry , so where in the hell is this paper n coin ?
Or how does money go about ?
Imagine a society with 10 people they have 100 shillings in circulation , out of the 10 , one has kshs 30, six have kshs 10 each , three have nothing, kshs 10 is in the bank … Will all this money will there be a time it will vanish and the society go hungry ?
Money is just means of exchange and main function of money is value exchange. Say; If you are a professional photographer, you exchange your services with another service (an equivalent of that value) but since you dont need that service at that moment, you get money which represent the service.
Service might be rent, hoes etc. Money will just store that value. If people face unprecedented turn of event, people minimize spending on unwanted things, and work towards saving. Instead of visiting say lake naivasha, you will opt to chill at home. Naivasha people who depend on local tourists will find it hard to survive loosing jobs etc.
If everyone have equal share of money, and beacause we said money is just a medium, it will have no value thus, inflation.
Ok, when economic activities are on a low, the circulation of money reduces. People take less credit. The MPS is high and thus when people save, the banks daily deposit to the central bank and only withdraw what they need the following morning. The central bank will hold or release the money accordingly to prevent inflation. Read about bonds and treasury bills to understand how money is released into the economy