Definition of Money
Money is any verifiable record or an item that is usually acknowledged as payment for goods & services. It is a repayment of debt as per socio-economic context.
The word "money" is believed to derive from a temple of Hera, Capitoline, one of Seven Hills of Rome. In the ancient world Hera was often related with money.
The main functions of money are:
• A medium of exchange
• A unit of account
• A store of value
• A standard of deferred payment
Any item that accomplishes these functions can be regarded as money.
Money is historically a growing market trend instituting commodity money, but practically all contemporary money systems are based on fiat money. Fiat money, akin to note of debt or any check, is devoid of intrinsic use value as a physical product. It derives its worth by being affirmed by a government to be legal tender; that is, it must be taken into account as a form of payment within the precincts of the country.
The money supply of a country contains currency (coins or banknotes) and generally includes bank money. Bank money, which contains only records, forms by far, the biggest part of broad money in developed countries. Broad money commonly includes demand deposits at commercial banks. It also includes monies held in easily reachable accounts. Components of broad money are liquid, and non - cash components can generally be converted into cash very easily.