While a deeper look at money did raise many questions, there are at least some foundational truths that can be discerned about money.
For example, many economists and experts in the field agree that money must be a medium of exchange, a unit of account, and a store of value:
Medium of Exchange
- Definition: Can be used to intermediate the exchange of goods and services.
- Use: A common ground for determining value.
- Example: A community uses beaver pelts as a medium to trade for other goods.
Unit of Account
- Definition: A standard numerical unit of measurement of market value for goods, services, and other transactions.
- Use: Can be used to compare goods using a common system.
- Example: Housing prices in Japan can be compared using the yen as a unit of account.
Store of Value
- Definition: Maintains its value over time.
- Use: Can be spent or exchanged at a later date without penalty.
- Example: An ounce of gold could buy a toga in Roman times, yet it can still buy a nice suit today.
The Properties Of Money
Infographic by Visual Capitalist and Texas Precious Metals
