MONEY

Money is anything that is generally accepted as a medium of exchange and in the settlement of debts.




In other words, money can also be defined as anything that is generally acceptable as a means of payment.

         

          Trade by barter.


Trade by barter may be defined as a form of trading in which goods are exchange directly for other goods without the use of money as a medium of exchange.


Disadvantages of trade by barter.
1. Waste of time.
2. Problems of indivisibility.
3. No room for deferred payment
4. It discourages borrowing and lending.
5. It discourages large scale production.

Characteristics of money.


1. General acceptability
2. Durability
3. Recognisable.
4. Stability
5. Homogeneity
6. Portability



1. General acceptability: Money must be generally acceptable by all in the society or country.
2. Durability: the object that will serve as money must be able to last long. It must not be a perishable commodity.
3. Recognisability: money must be easily recognised and identified by the totality of the people in the society.
4. Portability: money can be carried about

5. Portability: it must be easy to carry around.

6. It must be Homogeneity



Money performs the following functions


1. Medium of exchange
2. Unit of account
3. Store of value
4. As a measure of value.

Differences between money and other commodities used for exchange.


1. Money  is generally acceptable while other commodities are not.
2. Money is durable while other commodities are not.
3. Money is used as a medium of exchange, other commodities are not.

Forms or types of money


1. Coins
2. Commodity money
3. Bank notes
4. Legal tender
5. Deposit money
6. Partial money.