Money

Money is an item and verifiable record that is generally accepted based on trust as payment for goods, services and repayment of debts with distinguished functions of medium of exchange, a unit of account, a store of value and a standard of deferred payment.

“Any item of verifiable record that fulfils these functions based on trust can be considered as money” Money is a decaying item (the rate of decline in the value) due to inflation. Inflation is a general rise in the price level in an economy over a period.

Money as a medium of exchange for goods and services. Deposit accounts are a form of liability. Liabilities are obligations or promise to provide services. Interests are a payment for a liability. Payments are made by providing services. Money is created when promises to provide services are made. Money is destroyed when promised services were provided. Money to pay for interests is created by promising to provide services. The below attributes help us distinguish among five different means of payment: (1) central bank money; (2) crypto-currency; (3) b-money, which currently is issued by banks; (4) electronic money, or e-money, offered by new private sector providers; and (5)i-money, short for investment money, issued by private investment funds.

The ratio of the total money added to the money supply (in this case, $1,000,000) to the total money added originally in the…