Money Supply

Money supply looks at what money is and how it is controlled.

different types of money

3 Types of Money

Money is a medium of exchange. It allows two people to trade without needing what the other wants. This can come in all types and forms. So long as people trust and accept a certain form of money; it can be used as a medium of exchange. For example, gold was historically used as a form of monies. Farmers would go to market and sell their cows in exchange for a certain amount of gold. This gold could then be exchanged by the farmer for a loaf of bread from the baker.

Commodity Money Definition

Commodity Money Definition

We can define Commodity money as a physical good that consumers universally use to trade for other goods. In other words, it is like the money we use today, but has an actual value.