Money

Meaning:

Money is anything that people accept as payment for goods and services or to pay off debts. It can be cash, coins, digital balances, or electronic transfers. Money helps people buy, sell, save, and invest, making it easier than bartering (trading goods directly).

Functions of Money:

Medium of Exchange : It is used to buy and sell things.

Store of Value : It can be saved and used later.

Unit of Measurement: It helps measure the value of goods and services.

Standard for Future Payments: It is used to set prices for future transactions.

Difference Between Money and Cash:  Money includes all forms of value used to buy things, like cash, bank balances, UPI payments, cards, cheques, and digital wallets.

Cash is only the physical form of money, like paper notes and coins.

All cash is money, but not all money is cash

Types of Money: 

Physical Money: Cash and coins. 

Digital Money: Bank balances, UPI, and net banking.

Fiat Money: Currency issued by the government.

Commodity Money: Items like gold that were used historically as money.

Importance in Finance:  

Money is the foundation of the financial system, enabling borrowing, lending, investing,  pricing, and economic growth.

Role in Goods and Business:  

Money helps businesses buy raw materials, pay salaries, manage operations, and sell  products, keeping the economy moving.