Concept and
meaning of Money
In general money simply refers to the currencies
(notes, coins), produced by central bank of the nation. But in subject of
monetary economics and financial and public economics, the concept of money
isn’t this simple. Many arguments or views are given by different economists
regarding the money.
We considered here definition by some of the authors
"In order for anything to be classed as money,
it must be accepted fairly widely as an instrument of exchange." - A C Pigou.
"Money is anything that is habitually and
widely used as means of payment and is generally acceptable in the settlement
of debts." - G D H Cole.
"Money constitutes all those things which are
at any time and place, generally current without doubt or special enquiry as a
means of purchasing commodities and services and of defraying expenses." -
Alfred Marshal
By money is to be understood "that by delivery
of which debt contracts and price contracts are discharged, and in the shape of
which a store of General Purchasing Power is held."
- J M Keynes
- J M Keynes
In a conclusion money is anything which is widely
accepted in payment for goods or in discharge of other kinds of business
obligations.
Functions of
Money
1.
Primary function
a.
Medium of
exchange : prime and unique function of money
b.
Measure of value
2.
Secondary
function
a.
Store of value
b.
Transfer of
value
c.
Standard
deferred payment
3.
Contingent
function
a.
Distribution of
national income
b.
Basis of bank
credit money
c.
Maximum
satisfaction for consumers and maximum profit for producers