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.