What is Money ?

 Money

A cup of tea cannot be purchased with a ballpoint pen, but it may be purchased with cash. What distinguishes a pen from the cash in your wallet?

 Money is considered one of the greatest inventions of mankind. It has attracted the attention of very prominent thinkers and economists because of its amazing independence and decisive power.

The word "money" is thought to have its roots in a temple dedicated to the goddess Juno, which is situated on Capitoline, one of Rome's seven hills. Juno was frequently linked to money in ancient times. The mint of ancient Rome was housed in the temple of Juno Moneta Rome.

The names "Juno" and "Moneta" may have originated from the Etruscan goddess Uni, whose name meant "the one," "unique," "unit," and "unified," and from the Latin word "money," which means "to remember, warn, or instruct," or from the Greek word "moneres" (alone, unique).

Money is what money does, according to Prof. Walker's definition. It is connected to the jobs or roles that money performs.

However, an appropriate description must be thorough and emphasize both the fundamental qualities of money, namely its broad acceptability, as well as its significant uses. This criterion leads us to conclude that Crowther's definition is the most appropriate.

"Anything that serves as a measure and a store of value at the same time and that is universally accepted as a means of trade (i.e., as a method of paying debts." The Crowther

This concept emphasizes the general acceptance of money's fundamental quality while covering all three of its critical functions.

Money is a valuable item that can be used to buy things and is also stored as a valuable item. Prof. Sidgwick is saying that money is a tool that can be used to achieve specific goals. Thus, economists agree that everything that should serve as money should be generally acceptable. The meter could be used to measure the values of goods and services. Money can be used to store values; Therefore, considering the roles and functions of the currency mentioned above, experts follow the following methods to define currency:

• A transaction method using currency as a medium of exchange. 
• The liquidity approach to money holds that money is a good store of value, in that it can be used to purchase goods and services. 
• The scientific construct approach to value accepts money as a measure of value.

In ancient Asia and Africa, cow wealth was used as a form of money. In the fourth century B.C., the Roman State officially recognized cattle and sheep as a means of collecting fines and taxes. 

The second stage in the development of money is the introduction of commodity money. This type of money is based on a commodity, from which its value is derived. In ancient times, people used commodities such as cowrie shells, bows, arrows, gold, silver, food grains, large stones, decorated belts, cigarettes, copper, etc. as mediums of exchange. However, commodity money had various drawbacks, such as that there was no standardization of value for money, and it lacked the property of portability and indivisibility. This type of money became unsuitable as a means of exchange because it was not reliable. 

Next, you need to create coins or other forms of currency. This is just like commodity money, but the commodity is the metal that the currency is made of.

The next important step in the development of money was the use of paper money, which replaced the use of metal money. Around 1260 AD, Kublai Khan of the Yuan Dynasty introduced paper money made from tree bark in China. Others first refused to take paper money. King pressured people into accepting paper money. The transfer of money in terms of metallic currency was both inconvenient and risky. Therefore, written documents were used as temporary substitutes for money. Anyone can get a receipt for depositing money with a wealthy merchant or a goldsmith. These receipts and documents were not actual money, but temporary substitutes for money. This was the beginning of paper money. These paper notes gradually became currency notes. As the number of transactions increased, paper money became impractical because of the time it took to count it and the space it took to store it safely. 

This led to the introduction of bank money or credit money. Bank money is money that is held by banks and can be withdrawn through checks, drafts, or other methods. Cheques are increasingly popular for business transactions these days.

Fiat money is a kind of inconvertible paper money that is generally issued in times of contingencies. circulation of Earth money indicates the most efficient condition of the government in the monetary system German marks issued during the first world war (1914 - 17) are an example of this kind of money. 

Qualities Or Characteristics of Good Money

General acceptability

Portability

Stability of Value

Divisibility

Durability

Economic

Importance of Money

According to Crowther, "Money is one of the most fundamental of all man's inventions. Every branch of knowledge has its fundamental discovery. In mechanics, it is a wheel, in science fire, in politics vote. Similarly, in economics in the whole commercial side of man's social existence, money is the essential invention on which all the rest is based."

The importance of money in the modern economy is evident throughout its many uses. The economy relies on it to play a major role in supporting and facilitating economic activity. There is a lot of discussion about the importance of money in an economy. It can be seen as the lifeblood of an economy, and without it, many businesses and activities would not be possible. Money is essential for the production process. It helps to facilitate various aspects of the work. Money can help producers make decisions about their production activities, plan their work, and monitor the results. Additionally, having money makes it possible to assess the demand for a product by looking at how much people are willing to pay for it. If you want to be successful, you need to be persistent. To consume goods and services, people need money. This money can be earned through work or through other means. With the help of money, consumers can easily decide what they want and how much. They have a good understanding of the goods and services. They can delay their demands if needed. Money has helped distribute rewards more fairly and easily among the various factors of production. The reward can be distributed in terms of wages, rent, interest, and profit in the form of money.

There were several difficulties with the barter system of exchanges. That is the lack of double coincidence of desires, the problem of measuring value, the problem of future payments, etc. The invention of money has eliminated the many difficulties associated with bartering. There is no need to find two coincidences of wants or values to measure them easily in terms of money. 

Capital formation is essential for businesses to grow and create jobs. Money is necessary for businesses to invest in new products and services, and to expand their operations. Savings can be mobilized to finance more profitable ventures. Financial institutions are a part of this process. They use the saved money to help get the economy moving again. 

 Public finance is the field of study that deals with the income and expenditure of the government. The government gets its income from taxes and other means and uses it to make expenditures in development and administrative processes. 

External trade is the exchange of goods and services between nations. With the use of money, goods and services can easily and rapidly be exchanged. Though in external trade foreign currencies are used in receipts and payments they are exchanged with the help of domestic currencies.

Measurement of Money

M0 is the total amount of in-use money, including coins.

The value of all deposit accounts that can be promptly changed into cash of the same amount is included in the measure of money in circulation,

M1, which is equal to M0 plus sight deposits (known as "cash equivalent"). Checkable deposits, often known as demand deposits, are closely associated with money. because if a check is written or a debit card is used, the banking institution is required to deliver the deposit holder his money "on demand." 

M2 is equal to M1 plus time (or savings) deposits made at banks with open access.

Money market mutual funds, savings accounts, and small-time deposits are some other less liquid investments.

M3 Equals M2 plus larger, fixed-term deposits plus accounts at non-banking institutions.

Value of Money

Money's purchasing power determines its worth. The amount of products and services that one unit of money may buy is referred to as the money's value.

The level of prices for products and services affects its purchasing power.

The purchasing power of money is greater when prices are lower.

The purchasing power of money decreases with an increase in the price level. As a result, there is an inverse proportionate relationship between the purchasing power of money and the price of products and services.

V=f (1/p) can be used to express the value of money.

P equals the price level, and V is the value of money.

The value of money cannot be measured in absolute terms, and doing so is incredibly difficult. The worth of money is therefore always a relative concept. From a relative perspective, the worth of money is measured. A period's purchasing power is contrasted with that of other periods.

In conclusion, money is actually a trust or belief of people which can be exchanged with goods and services either in the form of notes and coins or in the form of digital currency such as bitcoin. The value of money decreases with time because of inflation so we have to invest money in such a way that its value increase. Lastly, you have a lot of options such as leaving the job you hate, living where you want, do what you want if you have money.