Money

Meaning of money

Economists define money as anything that is usually accepted in Payment for goods or services or in the repayment of debts
 

Medium of Exchange

Functions of the money

It is used to pay for goods and services. Promotes economic efficiency by minimizing the time spent in exchanging goods and services. It's to meet several criteria
It must

 be basically standardized

be widely accepted

be divisible

be simple to over

not deteriorate quickly
 

It is use to measure value in the economy. They measure the worth of Goods and services in terms of money, as weight in terms of pounds or distance in terms of miles 

 

Unit of AccountStore of Value

It is used to save purchasing power from the time income is received until the time is spent. It is useful for us because most of us prefer to wait until they have the time or the desire to shop. It is a repository of buying power over time
 

It is the process of conducting transactions in the economy and with it the type of money
Evolution of the payment process
 

It must be universally acceptable. Everyone must be willing to take it in the payment for goods and services Money made up of precious metals or another valuable commodity is called Commodity money

The commodity Money
 

Fait Money
*The next Development was paper money. Initially, paper money carried a guarantee that it was convertible in to coins or in to a fixed Quantity of precious metal however, money has evolved in to fait money Paper money decreed by governments as legal tender 

 

Checks

It is an instruction from you to your bank to transfer money from your account to someone else account when he deposits the check. Checks permit transactions to happen without the necessity to over around sizable amounts of currency