Money has been defined differently by different economists. But the most acceptable definition of money can be stated in terms of all the functions of money.
Money is anything which is generally accepted as a means of exchange, a measure and store of value and which also acts as standard of deferred payments.
Everybody needs money for various purposes starting from day to day transactions to saving for future. But if one goes back to history, will find that before money came into existence there was barter system to facilitate transactions among individuals in the society. With development of civilization over time, barter system lost its ground and was replaced by money.
Functions of Money
- Medium of Exchange
- Measure of Value
- Store of Value
- Means of deferred payment