Economics 12 Notes for Economics Notes

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Definition of money

Money is defined in different ways. It was firstly introduced just as a medium of exchange. The term money is derived from Latin word “Moneta” referred to goddess Juno. The coins were minted in the temple of Goddess Juno. That’s why the coins were known as money. Traditional definition of money is the medium of exchange and measurement of value. According to it, anything which is used as medium of exchange and measurement of value is called money. It is the functional definition of money. These functions are primary functions of money. However, money is used as not only medium of exchange but also as the medium of store of value, transfer of values, deferred payment, disbursement of credit, redistribution of income and wealth, reallocation of resources etc.

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