"Significance of Money "

"Money is whatever can be used in order to settle payments. Nowadays, the most common kind of money are current accounts in the banks."

Cash, a self-evident component of money, has a short life out of the banks. Within few days is spent, for example in a shop, and the shopkeeper brings urgently cash back to a bank.

Money plays three main roles:

1. It is the medium of exchange that settle payments. People accept money in exchange of goods and services. Nothing is owed anymore.

2. Money is the most common medium of account, i.e. it is the good some quantity of which serves as unit of account for prices. Prices are expressed using monetary expressions.

3. Money is a store of value over time and across people, firms, countries. Selling things gives money that can be saved and spent in the future for many different goods and services. However, there exist other financial instruments - and even goods - that can serve as a store of value as well.