Answer the following questions -
What are the different types of money?
The different types of money are:
i. Commodity money - Initially, human beings exchanged goods and services for other goods and services. In other words, commodity exchange or commodity money was more prevalent.
ii. Money in the form of metals - After commodity money was phased out, metals began to be used as a medium of exchange. Under the metallic monetary system, gold and silver were the two metals that were of particular important and were widely in use.
iii. Money in the form of paper - With further rise in the volume of trade, paper money came into existence and was widely used. This form of money was easier to carry and store. Thus, it became a medium of exchange in almost all the countries of the world.
iv. Bank money and credit money - Bank money can be said to be the most convenient and durable form of money. Nowadays, individuals frequently use credit money in the form cheques, drafts, credit cards etc..
v. Plastic money - Plastic money in the form of debit cards has also emerged as an attractive medium of exchange. Moreover, net banking facilities and online transactions have further reduced the risks involved in carrying paper money.
