What Is Money,Types Of Money, Function Of Money- Money Iqra

In today’s time, money is an essential part of our life. Without this, we cannot even picture our world, money really has a lot of power.

currency or assets is an ordinary concept that has extraordinary power in our life. Let’s talk about its definition first, In which we will also be covered that “what is money and what’s the role of money”

we will understand it with ease.

So after that today we will discuss on these topics,

Definition of money

Look, if I say in simple language, money is a medium of any commodity or service which is widely accepted as a standard form of currency. It is usually issued and regulated by a government or a bank, allowing individuals and organizations to use it for transactions.

Recommended : Earn Money Online Without Investment – Money Iqra

Types of money

It can be classified into various types based on its nature, form, and function. Here are some common types of money :

Fiat Money :

Fiat most common type of currency in modern economies. It has no intrinsic value but is declared by the government as legal tender. Fiat money relies on the trust and confidence of the public in its value. this is the type of currency that we use in paper cash like “Dollar” and “Euros”.

Digital Money :

Digital currency refers to currency that exists only in electronic form not physically in my hands such as cryptocurrencies like Bitcoin or ethereum.

Commodity money :

Commodity is a type of cash that has intrinsic value because it is made of a valuable commodity. Such item as gold, silver, shells, or salt have been used as commodity.

Fiduciary Money :

Fiduciary currency is called that which is under me means it is up to me whether I accept it or not like check it is up to me not to take payment from check I cannot be forced by government force for this.

Function of money

  • Buying or Selling : Money we use to buy or sell goods or services. It acts as a common way to exchange things we want or need. It is also called medium of exchange.
  • Store of money : As the name suggests, we can store capital, like people keep cash in the bank, this is also a function of money.
  • Standard of Deferred Payment : This type of money is used to repay loans and fulfill financial obligations. It serves as a means of repaying the loans we owe to others.
  • Value measurment : It helps us compare the worth of different items. We can assign prices to goods and services, making it easier to determine their value.

 

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