What is Money? Meaning
Money is i of the greatest inventions of mankind. According to Walker,
"Money is what Money does."
Image Credits © Mark Morgan.
In a wider sense, Money includes all mediums of exchanges similar Gold, Silver, Copper, Paper, Cheques, together with Bills of exchange, etc.
Definition of Money
According to Crowther,
"Anything that is to a greater extent than ofttimes than non acceptable equally a way of telephone commutation together with which at the same fourth dimension acts equally a mensurate together with shop of value."
Thus, Anything is Money, which is to a greater extent than ofttimes than non acceptable equally a medium of exchange, together with at the same fourth dimension it must human activity equally a mensurate together with a shop of value. Anything implies a affair to hold out used equally coin need non hold out necessarily composed of whatever precious metal. The exclusively necessary status is that, it should hold out universally accepted past times people equally a medium of exchange.
Functions of Money
Money performs 5 of import functions :-
- Medium of exchange : Money acts equally a medium of telephone commutation equally it's to a greater extent than ofttimes than non accepted. On the payment of money, purchase of goods together with services tin hold out made i.e. goods together with services are exchanged for money. Money bifurcates buying together with selling activities separately together with thence it facilitates the telephone commutation transactions.
- Measure of value : Money is a mutual mensurate of value together with thence it is possible to decide the charge per unit of measurement of telephone commutation betwixt diverse goods together with services purchased past times the people. Exchange value of commodity tin hold out expressed inwards price of money. For e.g. nosotros tin say that 10 metres of Cotton Cloth toll $220 dollars or Rs.10,000 rupees only.
- Store of value : Money acts equally a shop of value. Money existence to a greater extent than ofttimes than non acceptable together with its value existence to a greater extent than or less stable, it is ideal for occupation equally a shop of value. Being non-perishable together with equally good comparatively stable inwards value, the value of other assets tin hold out stored inwards the cast of money. Property tin hold out sold together with its value tin hold out held inwards coin together with converted into other assets equally together with when necessary.
- Standard or Deferred payment : Money is equally good inevitably used equally the unit of measurement inwards price of which all time to come or deferred payments are stated. Future transactions tin hold out carried on inwards price of money. The loans, which are taken at present, tin hold out repaid inwards coin inwards the future. The value of the time to come payments is regulated past times money.
- Transfer of value : Value of whatever property tin hold out transferred from i someone to about other or to whatever establishment or to whatever house past times transferring money. The transfer of coin tin bring house irrespective of places, fourth dimension together with circumstances. Transfer of purchasing power, which is necessary inwards commerce together with other transactions, has move available because of money.
