Quick Answer: What Are Two Definitions Of Money?

Money is anything which is used as a medium of exchange and has legal sanction of the government.

It possesses 100% liquidity.

Everybody is legally bound to accept it.

For instance, money in India consists of corns and paper notes..

What is money and its importance?

Money is often defined in terms of the three functions or services that it provides. Money serves as a medium of exchange, as a store of value, and as a unit of account. Medium of exchange. Money’s most important function is as a medium of exchange to facilitate transactions.

What are the classifications of money?

Classification of money Broadly, money can be classified as: (i) Full Bodied money; (ii) Representative Full bodied money; and (iii) Credit money. Money can be classified on the basis of relationship between the value of money as money and the value of money as a commodity.

What do you mean by bank money?

: a medium of exchange consisting chiefly of checks and drafts.

Legal tender is anything recognized by law as a means to settle a public or private debt or meet a financial obligation, including tax payments, contracts, and legal fines or damages. … A creditor is legally obligated to accept legal tender toward repayment of a debt.

What are the definitions of money?

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.

What is money in your own words?

1 : something generally accepted as a medium of exchange, a measure of value, or a means of payment: such as. a : officially coined or stamped metal currency newly minted money. b : money of account. c : paper money handed the bank teller a wad of money.

What are the 4 types of money?

Four Types of MoneyCommodity money.Receipt money.Fractional money.Fiat money.

In particular, all notes and coins issued by the BSP shall be fully guaranteed by the Government of the Republic of the Philippines and shall be legal tender in the Philippines for all debts, both public and private, Page 2 Frequently Asked Questions Coins and Notes July 2020 Metro Manila Currency Operations Sub-Sector …

What are the 2 types of money?

Money comes in three forms: commodity money, fiat money, and fiduciary money. Most modern monetary systems are based on fiat money. Commodity money derives its value from the commodity of which it is made, while fiat money has value only by the order of the government.

What is money definition and types?

Money is any good that is widely used and accepted in transactions involving the transfer of goods and services from one person to another. Economists differentiate among three different types of money: commodity money, fiat money, and bank money. Commodity money is a good whose value serves as the value of money.

What are the 6 characteristics of money?

The characteristics of money are durability, portability, divisibility, uniformity, limited supply, and acceptability.

But ‘Legal tender’ is the money that is recognised by the law of the land, as valid for payment of debt. It must be accepted for discharge of debt. … Currency notes are unlimited legal tender and can be offered as payment for dues of any size.

What is money short answer?

Money is a medium of exchange; it allows people to obtain what they need to live. Bartering was one way that people exchanged goods for other goods before money was created. Like gold and other precious metals, money has worth because for most people it represents something valuable.

What is the full form of money?

Full form of money : ➡ M – Momentarily. O – Owned. N – Not. E – Eternally.

How do you describe money?

Money is something (like coins or bills) accepted as a way of measuring value, trading value, and paying for goods and services. Funds describe money set aside for a special purpose. A cent is a coin represenbng one cent. The United States penny is equal to one cent.