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Money| Functions| Monetary Policy| Money Laundering| Commodity


Money is any commodity or verifiable record generally accepted as payment of goods and services and repayment of loans such as taxes in a particular country or socio-economic context. A country's money supply includes all currencies in circulation (currently issued banknotes and coins) and, depending on the particular definition used, one or more types of bank funds (balances held in checking accounts, savings accounts, and other types of bank accounts). Bank money, the value of which exists on the books of financial institutions and can be converted into physical notes or used for cashless payments, is by far the largest share of widespread wealth in developed countries.


The word money derives from the Latin word Moneta which means "coin" through the French money. The Latin word is believed to have originated from a temple of Juno on the Capitoline, one of Rome's seven hills. In the ancient world, Juno was often associated with money.


That use of methods such as barter may date back to at least 100,000 years ago, although there is no evidence of a society or economy that relied primarily on barter. Instead, non-monetary societies operated largely with the principles of gift economy and debt. When barter actually took place, it was usually between complete strangers or potential enemies. Many cultures around the world eventually developed the use of commodity money. It is thought by modern scholars that these first stamped coins were minted around 650 to 600 BC.

Paper money or banknotes were first used in China during the Song Dynasty. These banknotes, known as "jiaoji", the gold standard, a monetary system where the medium of exchange is paper notes that are pre-determined, convertible to certain amounts of gold, replaced the use of gold coins as currency in the 17th–19th centuries in Europe. These gold standard notes were made legal tender, and redemption in gold coins was discouraged. By the early 20th century, almost all countries had adopted the gold standard, supporting their legal tender notes with fixed amounts of gold.

After World War II and the Bretton Woods Conference, most countries adopted fiat currencies that were fixed for the US dollar. The U.S. dollar was fixed for gold in return. In 1971 the U.S. government suspended the convertibility of the dollar to gold. Many countries then separated their currencies from the U.S. dollar, and most of the world's currencies went unbacked by anything except the ability of governments to convert money into goods through fiat and payment of legal tender.

According to proponents of modern money theory, fiat money is also supported by taxes. By imposing taxes, states create demand for currency issued by them.


Money is a matter of actions,

A medium, a measure, a standard, a store.

Most modern textbooks now list only three works, that of the medium of exchange, the unit of account, and the repository of value, not considering the standard of deferred payment as an iconic function, but rather subsuming it into others.

Medium of exchange:

When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. For example, between two parties in a barter system, one party may not have or create the item that the other wants, which indicates the non-existence of coincidences of desires.

Measure of value:

Standard of deferred payment:

Store of value:

Money supply:

In economics, money is any financial instrument that can carry out the functions of money. These financial instruments are collectively known as the money supply of the economy.

The most commonly used monetary aggregates (or types of money) are the traditionally named M1, M2, and M3. These are successively larger total categories: M1 is currency (coins and bills) plus demand deposits (e.g. checking accounts); M2M1 Plus has savings accounts and time deposits less than $100,000; M3M2 Plus are large time deposits and similar institutional accounts. M1 includes only the most liquid financial instruments, and M3 relatively illiquid instruments. equipment. The exact definition of M1, M2, etc. may vary in different countries. M0 is the only money that can meet the reserve requirements of commercial banks.

Creation of money:

Currently, bank money is created as electronic money.

In most countries, most of the funds are mostly m1/m1 by lending commercial banks. M2 is made as. Contrary to some popular misconceptions, banks do not act simply as intermediaries, lend deposits that savers keep with them, and do not depend on central bank money (M0) to create new loans and deposits.

Market liquidity:

Types of Money:


Many commodities have been used as commodity money such as naturally rare precious metals, conch shells, barley, pearls, etc., as well as many other things that are considered to be of value. The object itself constitutes money, and money is the object.

Examples of items used as a medium of exchange include gold, silver, copper, rice, vampum, salt, pepper, large stones, decorated belts, shells, cannabis, candy, etc.


Fiat Money:


Paper Money:

Commercial bank:

Digital or electronic:

Monetary policy:

Modern monetary systems are based on fiat money and are no longer linked to the value of gold. The control of the amount of money in the economy is known as monetary policy. Monetary policy is the process by which a government, central bank or monetary authority manages the supply of funds to achieve specific goals. A failed monetary policy can have a significant detrimental effect on an economy and the society that depends on it.

Governments and central banks have adopted both regulatory and free market approaches to monetary policy. Some of the tools used to control the money supply include:

  • changing the interest rate at which the central bank loans money to (or borrows money from) the commercial banks

  • currency purchases or sales

  • increasing or lowering government borrowing

  • increasing or lowering government spending

  • manipulation of exchange rates

  • raising or lowering bank reserve requirements

  • regulation or prohibition of private currencies

  • taxation or tax breaks on imports or exports of capital into a country

Financial crimes:


Fake money is fake currency produced without the legal approval of the state or government. The production or use of fake money is a form of fraud or forgery. Forgery is almost as old as money. Before the introduction of paper money, the most prevalent method of counterfeiting involved mixing base metals with pure gold or silver. One form of forgery is the production of documents by legitimate printers in response to fraudulent instructions.

Money laundering:

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