2. WHAT IS MONEY?
Anything can be termed as
money
which
has
the
characteristic
of
general
acceptability, as a medium of
exchange and measurement
of value.
3. Or
Anything which is commonly
accepted as a medium of
exchange, measure of value
and store of value is called
money.
4. FUNCTIONS OF MONEY
PRIMARY
SECONDARY
CONTINGENT
Medium of
exchange
Measurement
of value
Distribution
of National
Income
Store of
value
Transfer of
value
Standard of
deferred
payment
Guarantee of
solvency
Basis of Credit
and credit
creation
Bearer of
option
Maximization
of satisfaction
5. MONEY SUPPLY
The total volume of money
held by public at a particular
point of time in an economy is
called Money Supply.
6. COMPONENTS OF MONEY SUPPLY
There are two main components of
money supply Currency Component – It consists
of coins and currency (or paper)
notes.
Deposit Component – It consists
of the bank deposits, against which
cheques are issued.