Define Money.

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pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

According to economists, money can be anything that has the following qualities or functions.  Money must be able to function as

  1. A medium of exchange.  This means that you must be able to give it to someone and receive a good or service in return.
  2. Unit of account.  You must be able to express the value of a good or service in money.  If you are going to use something as money (say cigarettes) you have to be able to say "this is worth 10 cigarettes."
  3. Store of value.  In order for something to function as money, its value has to remain relatively constant over time.
luyandaaziza's profile pic

luyandaaziza | Student, Undergraduate | eNotes Newbie

Posted on

my personal view of what money is, is that it is a promisory note stating that the amount of money "promisory notes" you is backed up by a weight in gold. since we are unable to carry around kilograms of gold we are given money as a token backed up by the reserve bank ie the holders of your gold, stating that indeed you have the gold in their care and thus you are fit to purchase things to the value of that gold. this was the original system of money but somewhere along the line the system got corrupted and credit was born. credit is now saying that the money you have is money the bank has borrowed you to say you'll have the money"you currently don't" but you will at a certain given time.....

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