Money is anything that serves as a medium of exchange, a unit of account and a store of value. A medium of exchange is anything used to measure value during the exchange of goods and services. As a unit of account money is a way to compare the value of goods and services. Money can also be used as a store of value. This means money keeps its value if you hold on to it.

     The coins and paper bills used as money in a society are called currency. Currency must have six characteristics: durability, portability, divisibility, uniformity, scarcity, and acceptability. It must have durability, or be able to withstand a lot of use. It must have portability, or be easily carried and transferred. It must be divisible, or easily divided into smaller units. It must have uniformity, meaning that people must be able to count and measure money accurately. Currency must exhibit scarcity, meaning it must have a controlled supply. Finally, it must have acceptability, the ability to be accepted by all people in society.

     Representative money represents an object of value for which it can be exchanged. For example, paper receipts for gold or silver were an early form of representative money. The United States today uses fiat money. This type of money has value because the government states that it is an acceptable means to pay debts.