Coins and banknotes – the two most common physical forms of money.

Money is any object or record, that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context.[1][2][3] The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally, a standard of deferred payment.[4][5] Any kind of easily verifiable record serves these functions as well as an object (an "object" that is taken as money actually serves as just a type of secure record), and "digital money" that exists only as secure records in computerized files, is now the most common form of money.

Money originated as commodity money, but nearly all contemporary money systems are based on fiat money.[4] Fiat money is without intrinsic use value as a physical commodity, and derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private".

The money supply of a country consists of currency (banknotes and coins) and demand deposits or 'bank money' (the balance held in checking accounts and savings accounts). These demand deposits usually account for a much larger part of the money supply than currency.[6][7] As noted, bank money is intangible and exists only in the form of various bank records, but still serves as money.[8]

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Created by Maria Callas | Last updated January 1, 2011 | Posted in About - 939 views #money #coins