CHAPTER 1
THE CONCEPT AND DEVELOPMENT OF MONEY
Origin of Word Money
A generally accepted medium for the exchange of goods and services, for measuring
value, or for making payments. Many economists consider the amount of money and
growth in the amount of money in an economy very influential in determining interest
rates, inflation, and the level of economic activity. There is some disagreement among
economists as to what types of things actually should be classified as money; for
example, should balances in money market funds be included
The word money derives from the Latin word moneta with the meaning "coin" via French
monnaie. The Latin word is believed to originate from a temple of Juno, on Capitoline,
one of Rome's seven hills. In the ancient world, Juno was often associated with money.
Money Definition
Money is an economic unit that functions as a generally recognized medium of exchange
for transactional purposes in an economy. Money provides the service of reducing
transaction cost, namely the double coincidence of wants. Money originates in the form
of a commodity, having a physical property to be adopted by market participants as a
medium of exchange. Money can be: market-determined, officially issued legal tender or
fiat moneys, money substitutes and fiduciary media, and electronic cryptocurrencies.
Money is commonly referred to as currency. Economically, each government has its own
money system. Cryptocurrencies are also being developed for financing and international
exchange across the world.
Money is a liquid asset used in the settlement of transactions. It functions based on the
general acceptance of its value within a governmental economy and internationally
through foreign exchange. The current value of monetary currency is not necessarily
derived from the materials used to produce the note or coin. Instead, value is derived
from the willingness to agree to a displayed value and rely on it for use in future
transactions. This is money's primary function: a generally recognized medium of
exchange that people and global economies intend to hold, and are willing to accept as
payment for current or future transactions.
Barter
What Is Barter?
