Sat 7 Jul 2012
Money And It’s Characteristics
Posted by Robin Bal under economy , MoneyMatters , Personal FinanceAdd Comment
Money is a token that functions as a medium of exchange that is commonly accepted as payment for services or commodities, including repayment of debts. Another property of money, that distinguishes it from other medium of exchange, is that it has the mark of an authority (or the mark of anyone who is generally accepted) that coins it.
Money comprises of both currency, specially the numerous distributed currencies having legal tender status, as well as other kinds of financial deposit accounts, like savings accounts, certificates of deposit and demand deposits. In contemporary economies, currency is the most basic part of the money supply.
Money is not the same as value, the latter being the basic element in economics. Money is central to the study of economics and forms its most cogent link to finance. The absence of money causes a market economy to be inefficient because it requires a coincidence of wants between traders, and an agreement that these needs are of equal value, before a barter exchange can occur. The use of money is thought to encourage trade and the division of labour.
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