Economy

What Is Money?

Money isn’t valuable because of what it’s made of — it’s valuable because of what it does. This guide explains money through its core functions (medium of exchange, unit of account, store of value, and standard of deferred payment), the properties that make something practical as money (durability, portability, divisibility, fungibility, scarcity, and acceptability), and what actually “backs” the rupee today — not gold, but legal tender status and confidence in the RBI and government. We also draw a clear distinction between money, income (a flow), and wealth (a stock) — a distinction that sets up later topics in this series — and close with a brief note on money supply, and why most “money” in a modern economy exists as digital entries rather than physical cash.