What Is Money?

Before asking how money is created, we need to be clear about what is money? You may at first think the answer should be obvious – it’s the coins and paper you have in your pocket that you use to buy things. But when you try to define money, it gets trickier.
Basically money is anything accepted and commonly used as a means of exchange. In other words, it’s spending power – the ability to buy goods.

Before asking how money is created, we need to be clear about what is money? You may at first think the answer should be obvious – it’s the coins and paper you have in your pocket that you use to buy things. But when you try to define money, it gets trickier.