What Is Money? Pregnant Definition Functions Of Money

What is Money? Meaning

Money is i of the greatest inventions of mankind. According to Walker,

"Money is what Money does."

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In a wider sense, Money includes all mediums of exchanges similar Gold, Silver, Copper, Paper, Cheques, too Bills of exchange, etc.

Definition of Money

According to Crowther,

"Anything that is by too large acceptable every bit a agency of telephone substitution too which at the same fourth dimension acts every bit a mensurate too shop of value."

Thus, Anything is Money, which is by too large acceptable every bit a medium of exchange, too at the same fourth dimension it must human activity every bit a mensurate too a shop of value. Anything implies a affair to hold upward used every bit coin request non hold upward necessarily composed of whatever precious metal. The entirely necessary status is that, it should hold upward universally accepted yesteryear people every bit a medium of exchange.

Functions of Money

Money performs v of import functions :-

1. Medium of exchange : Money acts every bit a medium of telephone substitution every bit it's by too large accepted. On the payment of money, purchase of goods too services tin hold upward made i.e. goods too services are exchanged for money. Money bifurcates buying too selling activities separately too then it facilitates the telephone substitution transactions.
2. Measure of value : Money is a mutual mensurate of value too then it is possible to decide the charge per unit of measurement of telephone substitution betwixt diverse goods too services purchased yesteryear the people. Exchange value of commodity tin hold upward expressed inward price of money. For e.g. nosotros tin say that 10 metres of Cotton Cloth toll $220 dollars or Rs.10,000 rupees only.
3. Store of value : Money acts every bit a shop of value. Money beingness by too large acceptable too its value beingness to a greater extent than or less stable, it is ideal for utilization every bit a shop of value. Being non-perishable too likewise comparatively stable inward value, the value of other assets tin hold upward stored inward the shape of money. Property tin hold upward sold too its value tin hold upward held inward coin too converted into other assets every bit too when necessary.
4. Standard or Deferred payment : Money is likewise inevitably used every bit the unit of measurement inward price of which all futurity or deferred payments are stated. Future transactions tin hold upward carried on inward price of money. The loans, which are taken at present, tin hold upward repaid inward coin inward the future. The value of the futurity payments is regulated yesteryear money.
5. Transfer of value : Value of whatever property tin hold upward transferred from i individual to about other or to whatever establishment or to whatever house yesteryear transferring money. The transfer of coin tin bring house irrespective of places, fourth dimension too circumstances. Transfer of purchasing power, which is necessary inward commerce too other transactions, has travel available because of money.