The term “money” refers to a medium of exchange that facilitates transactions for goods and services. It can take various forms, including physical currency like banknotes and coins, or exist digitally as bank balances and electronic transfers. For instance, individuals might use cash to purchase groceries or utilize a debit card linked to their bank account for online shopping.
Throughout history, diverse commodities, from shells and beads to precious metals, have served as currency. The development of standardized coinage and, later, paper money revolutionized trade and economic growth. A stable monetary system is fundamental to a functioning economy, enabling efficient resource allocation and promoting economic stability. It provides a standardized unit of account, simplifies transactions, and acts as a store of value, facilitating saving and investment.
