Money is any good that is widely used and accepted in transactions
involving the transfer of goods and services Anything is Money, which is
generally acceptable as a medium of exchange, and at the same time it
must act as a measure and a store of value. Anything implies a thing to
be used as money need not be necessarily composed of any precious
metal. The only necessary condition is that, it should be universally
accepted by people as a medium of exchange from one person to
another.
Functions of Money
Money performs five important functions :-
1. Medium of exchange : Money acts as a medium of exchange as
it's generally accepted. On the payment of money, purchase of
goods and services can be made i.e. goods and services are
exchanged for money. Money bifurcates buying and selling
activities separately so it facilitates the exchange transactions.
2. Measure of value : Money is a common measure of value so it is
possible to determine the rate of exchange between various
goods and services purchased by the people. Exchange value of
commodity can be expressed in terms of money. For e.g. we can
say that 10 metres of Cotton Cloth cost $220 dollars or Rs.10,000
rupees only.
3. Store of value : Money acts as a store of value. Money being
generally acceptable and its value being more or less stable, it is
ideal for use as a store of value. Being non-perishable and also
comparatively stable in value, the value of other assets can be
stored in the form of money. Property can be sold and its value
