The Meaning of Money
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Prior to the creation of money, individuals & firms had to accept other goods or services as payment, or be self-sufficient by producing everything required
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Often lacking self-sufficiency or driven by the desire for a wider range of goods/services, bartering became the norm but it too had problems
- As individuals & firms trade with each other in order to acquire goods or raw materials, they require a means of exchange that is acceptable & easy to use
- Modern currency fulfils this purpose & money functions as a medium of exchange, a measure of value, a store of value, and a method of deferred payment