MONEY Definition

•         A medium of exchange.

•         With the help of money any exchange of goods and services can take place.

•         Money is said to be the most liquid asset among all the assets of a man.

•         It has general acceptability as a means of payment and liquid characteristic. Keynes called this liquidity preference.

•         Generally money is created by the Central Bank or the Government of a country.

•         These are legal tender money as there is legal compulsion for their acceptance.

•         They also called as Cash Money.

•         Another considerable flow of money is Credit Money — created by the commercial banks by their loan transactions.

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