Money can be defined as any thing that is generally acceptable as a means of exchange and at the same time acts as a measure and as a store of value.
It is an essential quality of money that it should be acceptable as a means of payment. The economy can not work efficiently unless money serves as a Standard of value.
Following are the important functions of Money:
Medium of Exchange: Money serves as a medium of Exchange. It passes from hand to hand in exchange for goods and services. Goods buy money and money buys goods.
Store of Value:
Perishable goods can not be stored for a longer period. In this case money has an advantage over goods, so money provides as easy means of storing wealth as compared to other goods.
Standard of Deferred Payments: In case of transaction involving future payments money enables exchange of present goods for future goods.
Money as a Liquid Asset: Money is the liquid asset because it can be used at any time. We can purchase any thing or we can save it for future or we can do the investment. There is no problem in using it.
The classic functions of money are:
1) Exchange of value. You work or sell some product for money which you use to buy things you want.
2) Store of value. Money doesn't evaporate or decompose so you can keep it until you want to spend it, in cash at home or in a bank.
3) Standard of value. You evaluate your possessions or things you might want in terms of their money value.(or maybe other peoples possessions)
more interesting, I think, are the essential characteristics of money.
1) It has an exact amount
2) It has an owner.
3) It exists, and is used, according to an authority or a tradition, the government usually.
Money in a bank account has these 3 characteristics and almost nothing else. It has no physical existence. Most money in the world comes and goes from one account to another electronically, never becoming anything real.
Functions: Medium of exchange, measure of value, and store of value.
Characteristics: Divisibility, portability, stability, durability, difficulty in counterfeiting,
There are four major functions of money. Firstly, money is the medium of exchange and people can buy products and get services in exchange of money. Secondly, money is the unit of account in which values are stated and recorded. In other words money is used as a unit like how many pounds are equal to 1 US dollar. Thirdly, money is the standard of deferred payment. It means that a payment can be deferred for the future and a specific amount of money can be paid in future for which the services or expenses have consumed currently. Fourthly, money is used as a store of value because stored money is known as wealth of an individual which can be utilized in future.
Medium of exchange
is acceptable to concerned parties
In the beginning money was used to perform some certain functions but later on with economic advancement of the society money began to perform other functions also The functions of money are as follows: Medium of exchange: This is the most important function of money. Formerly, there was nothing with which goods could be sold or bought. But with money the selling and purchasing of goods became quite easy. Now commodities are exchanged for money. Common measure of value: Money is also common measure of value. The values of all commodities are measured in terms of money. For example, rupee is a common measure of value in Pakistan, a pound sterling in England and a dollar in the U.S.A. Standard of deferred payments: Money functions as standard o deferred payments. The value of money is more stable than any other commodity. Due to this borrowing and lending is carried on in terms of money. Money enables a creditor to get back the same value, which he has lent Store of value: Money enables persons to preserve value for a long period without fear or loss. This is not possible in case of other commodities, as most of them are perishable
Do you mean what is money or why do we have money....one reason for paper money would be so you don't have to carry around a pocket full of gold(just think how heavy that would be to lug around gold all the time)...money also takes the place of bartering services for everyday needs and wants...I just watched a special on a island of people that used boulders/stones for currency..."yap"...money would be anything that is considered a common /of equal value item between a group of people/nations...unlike the spaniards giving scrap copper to indians for fur,food,crops,workers....which would be considered uneven/unfair trade practices....and today we have what we have with the criminal wall street profiteers using loopholes to steal money from others that don't know the loopholes of insider trading or what they call speculating making money for guessing what a money market/stock/commodity mite do in the future basically making money from thin air.....oops said to much later
store of value
To be a commodity that is accepted in trade and payment for services, good and lodging without question. It is used to pay for employees services and bills incurred in the daily transactions of life.
It's just to show how much have worked (or what you are worth). It's like a thank you that you can trade for goods.
Money is anything that is generally accepted as payment for goods and services and repayment of debts
The main uses of money are as a medium of exchange, a unit of account, and a store of value.