Money






The concept of money is very difficult to define. Therefore, it is easier to understand what money consists of than to give any universally acceptable definition of money. Economists have defined money on the basis 0f these functions. The important function of money is to acts as medium of exchange. Money is what money does. Following this approach, Crowther has stated that money is” anything that is generally acceptable as a means of exchange and that at the same time acts a measure and a store of value “. But this definition has some drawbacks. Historically, many things like banana, shells, goats, metals, etc. have served as money. Animal money had the disadvantage of indivisibility and was susceptible to disease, old age, and death. It was also expensive to store. Different economics have defined money in different ways. Some of the definitions are as follows.

In Ely’s definition, “Money is anything that passes from hand to hand as medium of exchange and is generally received in final discharge of debts.” According to Marshal, “All those things which are current without doubt or special inquiry as a means of purchasing commodities and services and job defraying expenses are included in the definition of money.” Similarly, Keynes has defined money is that by the delivery of which debt-contracts and price contracts are discharged in the shape of which a store of ge3neral purchasing power is held.”