MONE

Y
CONTENT
S
Introduction
Types of money
Functions of money
Banking system
Conclusion
WHAT IS
MONEY ?
Money is any good that is widely used
and accepted in transaction involving
the transfer of goods from one person
to another.
In simple, money is medium of
exchange.
 Intrensic

Durability
Transportability

CHARACTERISTICS

Limited Divisibility
Supply

Acceptability
 TYPES OF
MONEY

1. Commodity Money
2. Fiat Money
Bank Money
1.
3.
Commodity Money

Commodity money is a money

whose value comes from a
commodity of which it is made.
Gold coins are the examples of
commodity money.
Commodity money has been
replaced with Fiat money.
FIAT MONEY

Fiat money is a government issued

currency that is not backed by any
physical commodity, but rather the
government that issued it.
Currencies are the examples of fiat
money.
Fiat money is a money, whose value
is less than the value that is
represented on the money.
BANK MONEY

Bank money consists of the book

credit that banks extend to their
depositors.
Credit or debit cards, DD, Cheques
etc. are the examples of bank
money.
FUNCTIONS OF
MONEY

1. Money as a unit of value.

2. Medium of exchange.
3. Store of value.
 Money as a unit of value

Money measures the value of various goods and which are produced in an economy.
Money works as standard of value.
Money works as common measure of value by expressing exchange value of all goods and
services in money in the exchange market.
 Medium of exchange

Money facilitates transactions of goods and services as a medium of exchange.

Eg: Producers sell their products to wholesalers in exchange of money. Wholesalers sell the same
goods to consumers in exchange of money.
 Store of value

It was virtually impossible to store surplus value under barter economy, the discovery of money
has removed this difficulty.
Saving in money is not only secure but its possibility of being destroyed is very less. Besides, it
can be used whenever needed.
Money has become the only basis of promoting capital formation.
BANKING
SYSTEM

1. Central Bank
2. Commercial
Bank
 Central Bank

Issue Currency
Banker to other bank
Be a holder of the country’s gold and foreign currency reserve
 Commercial Bank

Accepting deposits
Providing loan
Providing other banking services and facilities
 CONCLUSIO
N
Money is the medium in which price and value are expressed and it circulates from person
to person and country to country, thus facilitating trade.
 THANK YOU

THE MONEY YOU MAKE IS A

SYMBOL OF THE VALUE YOU
CREATE