INFLATION AND FUNCTIONS OF MONEY 504 Words 3 Pages The impact of inflation on the functions of money Money refers to any commodity which functions as medium of exchange or the settlement of a debt.
INFLATION AND FUNCTIONS OF MONEY 504 Words 3 Pages The impact of inflation on the functions of money Money refers to any commodity which functions as medium of exchange or the settlement of a debt.
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INFLATION AND FUNCTIONS OF MONEY
504 Words 3 Pages
The impact of inflation on the functions of money
Money refers to any commodity which functions as medium of exchange or the settlement of a debt. In a modern economy bank notes and coins clearly form part of the money supply as they are acceptable in the settlement of all transactions. Moreover some transactions are settled by cheques drawn on bank deposits in current accounts (also known as sight or demand deposits). Thus current account deposits also form part of money supply. Deposits accounts with banks and other financial institutions are also included in the supply of money.