Wednesday, February 10, 2010

What is money?

We all want it, we all need more of it and we all use it. Money is anything that is generally accepted as payment for goods and services and repayment of debts. Typically it is said that money acts as a unit of account, a store of value, and a medium of exchange. However, that money acts as a unit of account and a store of value are extra features that are implied by it being a medium of exchange. In actuality, there are many other commodities that are a better store of value than money. Nevertheless, it facilitates trade better than any other commodity. With the existence of money, our lives are a lot easier, and our economy more efficient. Can you imagine how cumbersome it would be if we were all barter traders?
It must be pointed out that credit cards are not a form of money and that having money is not the equivalent of being wealthy. This would otherwise imply that printing money will make us richer; a laughable notion.

Thanks a million:-)


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