Money is a medium of exchange that is widely accepted in transactions for goods, services, or to settle debts. It functions in several key roles:
Medium of Exchange: Money is used to facilitate trade, allowing people to buy and sell goods and services without the need for bartering.
Unit of Account: Money provides a standard measure of value, making it easier to compare the prices of different goods and services.
Store of Value: Money can be saved and retrieved in the future, retaining its value over time, although inflation can affect its purchasing power.
Standard of Deferred Payment: Money is used in credit transactions, allowing payments to be deferred to a later date.
Money can take various forms, including physical forms like coins and paper bills, as well as digital forms like bank deposits and cryptocurrencies. The value of money is largely based on trust and the stability of the issuing authority, such as a government or financial institution.