Question

Explain the different definitions of money.

Answer 1

1. Scitovsky states that “Money is a difficult concept to define, partly because it fulfills not one but three functions, each of them providing a criterion of moneyness those of a unit of account, a medium of exchange, and a store of value”.
2. Sir John Hicks, says that “Money is defined by its functions, anything is money which is used as money, “Money is what money does”.
3. Some economists define money in legal terms saying that “anything which state declares as money is money”.