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| Refers to cash (currency notes and coin) in official currency backed by the relevant government. Such money may be [[legal tender]].
| | The value of a currency in terms of real purchasing power. |
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| More generally, money is anything accepted for the settlement of debts in an economy or jurisdiction.
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| | It is calculated by comparing the price of a hypothetical market basket of goods in two different countries, translated into the same currency at the prevailing exchange rate. |
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| To the economist, money is whatever is used for four roles:
| | It is useful in measuring the price competitiveness of domestic goods in international markets. |
| # A medium of exchange.
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| # A unit of account.
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| # A store of value.
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| # A standard for deferred payment.
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| Money, then, can be many things, but most often today is fiat (let it be) money, i.e. tokens provided by a government and accepted by them for payment of taxes, or abstract representations of it. The latter are mostly as electronic representations in the accounts of banks and other monetary financial institutions, including [[central bank]]s. Most money in developed countries consists of these records rather than of the tokens issued as fiat money.
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| In the past money has been commodity money, for example gold or silver or valuable spices or shells, the value of which is in the of the valuable material or object rather than a nominal value ascribed to (a portion of) it. A government can issue tokens (e.g. notes or coins) exchangeable for a fixed quantity of such a commodity. Such tokens are known as representative money.
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| == See also == | | == See also == |
| * [[Central bank money]]
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| * [[Cryptocurrency]]
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| * [[Currency]] | | * [[Currency]] |
| * [[e-money]] | | * [[Exchange rate]] |
| * [[Fiat currency]] | | * [[Real]] |
| * [[Finance ]]
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| * [[Financial stability]]
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| * [[Fungible]]
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| * [[Gold standard]]
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| * [[Legal tender]]
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| * [[Monetary]]
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| * [[Monetisation]]
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| === Other links ===
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| [http://bankunderground.co.uk/2015/08/21/monies-joining-economic-and-legal-perspectives/ Bank Underground blog: Monies - Joining economic and legal perspectives]
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| [[Category:Accounting,_tax_and_regulation]] | | [[Category:Manage_risks]] |
| [[Category:The_business_context]]
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| [[Category:Financial_products_and_markets]]
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Latest revision as of 23:46, 11 March 2023
The value of a currency in terms of real purchasing power.
It is calculated by comparing the price of a hypothetical market basket of goods in two different countries, translated into the same currency at the prevailing exchange rate.
It is useful in measuring the price competitiveness of domestic goods in international markets.
See also
