Simple Explanation of Money

Money is a universally accepted item or record used to exchange goods and services, measure value, and store wealth. It's fundamentally a social agreement that resolves the major inefficiencies of the barter system. 💰 Functions of Money Money performs four core functions in an economy: 1. Medium of Exchange This is its most critical role. Money acts as an intermediate instrument used to buy and sell things, eliminating the need for a Double coincidence of wants.** You sell your labor for money, then use that money to buy what you need from anyone who accepts it. 2. Unit of Account Money provides :a common standard for measuring the value of all goods, services, and debts. All values are expressed in a single, common unit (e.g., dollars or euros), which makes pricing, economic comparison, and accounting straightforward. 3. Store of Value Money allows **purchasing power to be saved and transferred into the future**. You can earn money today and hold it to spend later. T...