Different Types of Money? What are the Types of Money?

Money is a medium of exchange that allows people to trade without needing what the other person wants. In other words, money acts as an intermediary. Instead of direct trade, indirect trade can be done instead.

Now let's look at these three types of money in next slide

Commodity money

Commodity money has value other than its use as money. For example, gold can be used as a medium of exchange, but it can also be used for jewellery, gilding, or as an insulator. Simply put, it has other uses.

Commercial money

Commercial money is the part of the currency that is made up of accounting money - debt generated by commercial banks

Fiduciary money

Fiduciary money is notes and coins available for use in the economy.

Fiat Money

Fiat Money are the types of money that are legal tender by government regulation or fiat.