Money is a commodity that is used and accepted as payment for the purchase of goods and services, to pay outstanding debts, and for trading purposes. Money also serves as a medium of exchange and a standard of value.
Money can be currency, such as paper bills, coins, checks, credit cards, and other devices and materials that can be circulated to pay for business transactions.
Without money, the standard exchange for acquiring goods and services would be barter and/or trade of one commodity for another. The use of money is more convenient and economically sound in today's fast paced economy.
The value of money is reflected in it's level of purchasing power. Value goes up as prices go down and value goes down as prices go up.
There are many forms of money. As a medium of exchange, money is used as a primary commodity for sales and purchases.
•In this form, the exchange of goods and services for money is transacted with confidence by the person accepting it with reasonable confidence that others will accept the same money for purchases or payments in the future.
•The usefulness of money insures it's acceptability and gives confidence to those who exchange it in good faith.
•Money allows exchanges to take place fast and efficiently.
•Money offers a high standard of convenience to buyers and sellers of goods and services.
As a standard of value, money is exchanged as a commodity with at least one exchange value.
•This value is made to an equal number of units of another commodity that is acceptable by parties involved when making an exchange.
•This means that the money is worth the value of the product that it is being exchanged for and any number of products may be calculated at that rate of exchange
The standard rate of exchange is usually set by each nations own governmental monetary systems as measurements for the value of goods and services that are bought and sold within it's borders.
•Most nations use gold and silver and other metallic coins as standards of value today.
•Money is used as a high and reasonable value for exchange of goods and services, as well as a convenient means for saving for the future.