Question

Properties of money money plays a major role in the daily life of all americans. throughout american society, individuals earn, pay, owe, lend, and hold money. it is a necessary item, in the economic sense, that facilitates the satisfaction of various wants and needs. we exchange money for the food we eat, clothing we wear, and shelters we inhabit, frequently without giving a thought as to what it is or how it functions.

Answer 1

Money serves as a medium of exchange, unit of account, store of value, and standard of deferred payment. It simplifies transactions within an economy, unlike barter systems that require a double coincidence of wants. Money supply is measured in forms such as M1 and M2, and banks manage these funds.

Step-by-step explanation:

The Role of Money in the Economy

Money is a fundamental component of modern society, serving several key functions within an economic system. It operates as a medium of exchange, a unit of account, a store of value, and a standard of deferred payment. Money can be categorized into commodity money, which holds intrinsic value, and fiat money, which is valued by government decree. The efficiency of money as a medium of exchange outperforms barter systems, which require a double coincidence of wants—this means each party must have what the other desires. Without money, such as in a barter system, trade becomes highly complex and inefficient, especially in a contemporary economy with a diverse set of goods and services.

The measurement of money supply within a nation's economy is also crucial. M1 includes currency and checking accounts, while M2 expands on M1 by including savings accounts, time deposits, and money market funds. Banks play a crucial role in the economy by managing these forms of money and facilitating transactions and savings.