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Commodity money is that money whose value comes from a commodity, out of which it is made. The second stage in the evolution of money is the introduction of commodity money. Similarly, in the fourth century B.C., the Roman State had officially recognized cow and sheep as money to collect fine and taxes. In ancient India, Go-Dhan (cow wealth) was accepted as form of money. Acceptance of optional money depends upon the will of a person. It comprises credit instruments like cheques, drafts, bills of exchange, etc. Walker, Robertson, Seligman, etc., have used different characteristics for defining it.įiduciary optional money is non-legal tender money as it is generally accepted by the people in final payments. Still, a large number of economists have given variety of definitions, some definitions are too extensive while others are too narrow. It is very easy to understand but difficult to define. Money is one such concept which is very difficult to be restricted to some well-defined set of words. Before we arrive at the most suitable definition, it is essential to study a few definitions of money as given by some eminent economists. To serve as money, the definition of money should be comprehensive enough to cover all the essential functions that money performs in the economy. While some economist like WALKER has defined money in terms of the functions, while others like KEYNES, COLE, ROBERTSON, etc., have emphasized on the general acceptability aspect of it. Money has been defined differently by different economists.
Principal definition economics how to#
Now-a-days everybody recognizes money but usually does not know how to define money. The name “Juno” may derive from the Etruscan goddess Uni (which means “the one”, “unique”, “unit”, “union”, “united”) and “Moneta” either from the Latin word “monere” (remind, warn or instruct) or the Greek word “moneres” (alone, unique). The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located. In the ancient world Juno was often associated with money. The word “money” is believed to originate from a temple of ‘Juno’, located on Capitoline, one of Rome’s seven hills. Rulers in all lands found that making coins is a profitable business and took it into their own hands. Even live animals served as a medium of exchange at different times in different parts of the world. Wheat, corn, tobacco, skins, beads, gold, etc. The different types of money indicate the different stages of the development of money. It is the result of a process of evolution through several hundred years. The development of money was rather slow.
In fact, this is one of the reasons which makes international trade different from internal trade.
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