Money is defined as assets that can readily be used to make transactions and acts as a medium of exchange. It serves three main functions: as a medium of exchange, a store of value, and a unit of account. There are two types of money: fiat money which has no intrinsic value like paper currency, and commodity money which does have intrinsic value like gold coins. The money supply is the total quantity of money available in the economy and is controlled by monetary policy which is conducted by central banks. Velocity is the rate at which money circulates and is calculated as the value of all transactions divided by the money supply. Inflation and interest rates are also related, as an increase in inflation will cause an equal increase in