Defining By Its Uses
Money can be defined by its many uses. The main of which it functions as are 1. a medium of exchange, 2. a unit of account, and 3. a store of value. People accept the idea of money because in their minds they don't think "I like the look" but are thinking "I can use that of which I get now to get something for myself later". Money, like many things, are applicable in many ways, shapes, and forms. From buying shoes at a clothing store or fries at a fast food restaurant there is hardly anything that doesn't have a price overhead.
Medium of Exchange:
is anything that is traded broadly for goods and services in an economy. |
Unit of Account:
is simply the unit by which the prices of all other items are quoted. |
Store of Value:
is when people are paid in money and expect to be able to spend that money on purchases now and in the future. |