“Money is what money does”

In general terms money can be defined as anything through which purchase and sale of any commodity takes place. Till date any economist has not defined the proper meaning of money out there are three basic conditions which should be fulfill in terms of calling substance as money. These three basic conditions are.

i)          Store of value

ii)         Medium of exchange

iii)        Unit of account

Any ting which duly fulfills these three basic and primary conditions is called as Money. Money is issued in forms of notes by Reserve Bank of India (except one rupee note) and coins and one rupes note is issued by finance government. Money issued by these two institutions are termed as legal tender money. Legal tender money are legal in nature and no one can refuse it while accepting. Whether it is in form of notes or coins or any denomination, an individual cannot refuse its acceptance. Money has various functions to pray.

Qualities of money are as follows:

1)         Acceptability

2)         Durability

3)         Divisibility

4)         Portability

5)         Uniformity

6)         Recognizability
7)         Scarcity

8)         Stability

These qualities are together termed as ADDPURSS.

1)         Acceptability

Money should be accepted everywhere, which are legal tender money. It is basic function of money to be accepted.

2)         Durability

Money should be durable in nature, this means money last long and cannot be worsen the condition. In case notes are torn or not in good condition they can be exchanged with banks. There should be large durability.

3)         Divisibility

Money should possess function of divisibility. Which means that larger amount can be converted into smaller denomination and small denomination can be converted into larger denomination.

4)         Portability

Important function money should possess is of portability, it should be easy for the user to carry it with himself within the country as well as outside the country.

5)         Uniformity

There should be uniformity in money which means that currency of same denomination should be made up of same element irrespective of its shape, size, colours, etc. This helps an literate as well as illiterate to distinguish among different denomination of money.

6)         Recognizebility

Money should be made up of such elements, quality or any metal which enables them to be recognized easily.

7)         Scarcity

Money should not be in scarce as it will lead another problem. This means that the intrinsic value of money should not be scarce. Therefore government should that element which are not scarce in nature.

8)         Stability

Money, the element which it is made up of should not be scarce therefore it should be stable in nature. This means money should be stable.

Besides these, there are money importance of money in this world. It is an essential element.

Some importance of money are as follows:

1)         Any financial transaction is not fulfilled without money.

2)         Any business, enterprises, cannot carry on with its transaction without money.

3)         Money is helpful in fulfilling daily basic needs and also high purchase power raises the standard of the people.

4)         Salary paid, rent paid, purchase and sale is purely incomplete without money.

5)         Money enables the public to fulfill their basic, needs luxury needs and all other kinds of needs.