Money

People wishing to achieve their ends often have to trade. They can exchange their goods directly, if they have matching preferences and suitable goods, or indirectly, with the help of another good, the medium of exchange.

The most commonly used medium of exchange is called money.

Medium of exchange and money

Interpersonal exchange is called indirect exchange if, between the commodities and services, that are the ultimate end of exchanging, are one or several media of exchange.

A commodity that comes into general use as a medium of ex­change is defined as being a money. Evidently, the concept of a "medium of exchange" is precise, unlike the concept of "money". The point at which a medium of exchange comes into "common" or "gen­eral" use is not strictly definable, and whether or not a medium is a money can be decided only by historical inquiry and the judgment of the historian. However, for purposes of simplifica­tion, and since there is a great impetus on the market for a medium of exchange to become money, we shall refer to all media of exchange as moneys.

Types

Fiat money

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