Money is anything that serves as a medium of exchange. A medium of exchange is anything that is widely accepted as a means of payment. Money is treated as a medium of exchange that is centralized, generally accepted, recognized and facilitates transactions of goods and services, is known as money.
· Money is a medium of exchange for various goods and services in an economy.
· The money system varies with the governments and countries.
· Different countries have different currencies
· The central authority is responsible for monitoring the monetary system
· There are many forms of money, and cryptocurrencies is the newest addition to the forms of money and can be internationally exchanged.
Characteristics of Money:
Fungible currency: A currency must be fungible, which means that the units used as a currency must be equal in quality and shall be interchangeable. A non-fungible currency form of currency is not considered eligible for transactions.
Durable: A good currency is durable enough to be used more than just one time. It should not be perishable. A perishable good or article should not be used as a currency because it cannot be used multiple times and also cannot be stored for further transactions. Therefore, to conserve the future oriented use-value of the money, a currency must be durable.
Easily
recognizable: The use of the
money must be ascertained of its authenticity. In other words, the currency
must be universally recognized. An unrecognized currency or money leads to
disagreement with the exchange terms. A
recognized currency ensures trust in the money system as well as its acceptance.
Stability: A currency must be stable in terms of value. In
simple terms, money should have a constant or increasing value. Money cannot be
unstable whose value keeps drastically changing. An unstable currency can give
room to the risk of a sudden drop in value which can hamper the acceptance and
authenticity of the money system.
Portable: A currency must be portable and can be
conveniently transported from one place to another. The money must be divided
into various quantities making its use better. Money if not portable can lead
to an exceeded cost of transportation of the currency itself. Therefore, money
should be able to be divided into further smaller units to facilitate smooth
transactions of various quantities of goods. Secondly, it should be easily
transferable and portable.