Money

Money is a good that acts as a medium of exchange in transactions. Classically it is said that money acts as a unit of account, a store of value, and a medium of exchange.

The money supply comprises currency— notes and coins issued by the central bank and the Treasury—and various kinds of deposits held by the public at commercial banks and other depository institutions such as savings and loans and credit unions.

Before coins or paper money, people exchanged (traded) fish for stone tools or leather goods for wood. This method of exchanging one thing for something else is called barter. It had a pre-requisite: double coincidence of wants. Both the parties should exchange those goods which are required by each other.

The difference between barter and money is the situation. Money can be used in most situations; in a barter, each individual must have something to exchange that the other individual needs or wants.
 
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