MBF 833- Money and Banking

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It appears that there are many definitions of money as there are writers of economists. A number of definitions shall be examined here. One of such definitions is that of Paul Samuelson, who defined money "as the modern medium of exchange and the standard unit in which prices and debts are expressed". Money has also been defined as an asset which is used as a medium of exchange, a store of value and a standard for deferred payment or value. Money is looked at as anything legally acceptable in the discharge of obligations within a political boundary, expressed as a multiple of some unit which is regarded as a measure or standard of the value of things in general. Money can also be defined as anything which passes freely from hand to hand and is generally acceptable in the settlement of a debt. Lewis E. Davids in his 'Dictionary of Banking and Finance' defined "money as any form of denomination of coin or paper currency of legal tender which passes freely as a medium of exchange” In banking operations, money refers to cash and this includes both currency notes (paper money) and coin (metallic money). The word 'MONEY' according to Messrs. Pierce and Shaw, has two definitions The first is an abstract meaning that refers to money as a unit of account or the measure of exchange value. By this definition, money is a common denominator in terms of which the exchange value of all goods and services can be expressed. It is a unit of measurement, just as kilometres measure distance. This gives the money an abstract meaning.

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MBF 833- Money and Banking

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