Professor
So, let's talk about money. What is money? Well, typically, people think of coins and paper bills as money. But that is using a somewhat narrow definition of the term. A broad definition is this: money is anything that people can use to make purchases with. Since many things can be used to make purchases, money can have many different forms. Certainly, coins and bills are one form of money. People exchange goods and services for coins or paper bills and they use this money these bills to obtain other goods and services. For example you might give a taxi driver five dollars to purchase a ride in his taxi. And he in turn gives the five dollar to a farmer to buy some vegetables. But as I said, coins and bills are not the only form of money under this broad definition. Some societies make use of a barter system. Basically, in a barter system, people exchange goods and services directly for other goods and services. The taxi driver, for example, might give a ride to a farmer in exchange for some vegetables. Since the vegetables are used to pay for a service, by a broad definition the vegetables are used in barter as a form of money. Now as I mentioned there is also a second, a narrower definition of money, in the United States, only coins and bills are legal tender, meaning that by law, a seller must accept them as payment. The taxi driver must accept coins or bills as payment for a taxi ride, okay? But in the U.S, the taxi driver is not required to accept vegetables in exchange for a ride. So a narrower definition of money might be whatever is legal tender in a society, whatever has to be accepted as payment.