At first sight the answer to this question seems obvious the man or woman in the street would agree on coins and banknotes, but would they accept them from any country? What about cheques? They would probably be less willing to accept them than their own country's coins and notes but bank money actually accounts for by far the greatest proportion by value of the total supply of money. credit cards and gold? The gold standard belongs to history but even today in many rich people in different parts of the world would rather keep some of their wealth in the form of gold than in official, inflation prone currencies. The attractiveness of gold, from an aesthetic point of view, and its resistance to corrosion are two of the properties which led to its use for monetary transactions for thousands of years. In complete contrast, a form of money with virtually no tangible properties whatsoever electronic money - seems set to gain rapidly in popularity.

Money is a good that acts as a medium of exchange in transactions. Classically it is said that money acts as a unit of account, a store of value, and a medium of exchange. Most authors find that the first two are nonessential properties that follow from the third. In fact, other goods are often better than money at being intertemporal stores of value, since most monies degrade in value over time through inflation or the overthrow of governments.
>So money isn't just pieces of paper. It's a medium of exchange that facilitates trade. Suppose I have a Wayne Gretzky hockey card that I'd like to exchange for a new pair of shoes. Without the use of money, I have to find a person, or combination of people who have an extra pair of shoes to give up, and just happen to be looking for a Wayne Gretzky hockey card. Quite obviously, this would be quite difficult. This is known as the double coincidence of wants problem:

In this sense of a medium of exchange, money is both a social and an economic convenience. It makes complicated economic ex­changes more convenient and more efficient than if each person had to barter commodities and services directly with other people. Money is an important social institution. A complex society simply could not function without some kind of common medium of exchange. Money also allows people to specialize in what they do best and thus increase their efficiency in ways that benefit both themselves and others. People no longer have to produce everything that they need in the way of food, clothes, and housing. They can concentrate on what they do best, exchange that good or service for money, and then exchange that money for whatever else they want. As people specialize in this way, their productivity is in­creased.

Economic activity can take place without money. All transactions can be barter transactions in which people obtain a good or service that they want by trading away some other good or service that they value less. Because barter is inconvenient, barter systems exist only when exchange is uncommon. Suppose we have the mini-economy in the table below. If Crusoe visits Friday to buy coconuts, a trade may not take place. Crusoe wants coconuts, but Friday does not want fish. Exchange will take place only when one of the three realizes that he will have to accept something he does not want but which he can trade later. With only three people and three commodities, this realization will soon take place. However, if there are a hundred people with a hundred different commodities, the pattern of barter transactions necessary for everyone to end up with what he or she wants may be so complex that trade may not occur.1 As trading patterns become more complex, groups need to find a way to reduce the cost of making transactions. They spontaneously begin to use one commodity as an intermediary: they invent money.

If you have been following the global economy and its downturn over the last few months, then you have probably heard people talk about a problem with the money market and how this problem is impacting the economy at large. What is a money market and why is it so important? On its most basic level, the money market is where banks and individuals go in order to lend and borrow over the short-term. While there are larger markets dedicated to the long-term lending and borrowing of things like equity, the money market is dedicated to bailing out financial institutions in their times of short-term need. When a large bank or other financial institution needs short term liquidity, they head to the money market. Most financial trading happens with an eye on the long-term health of an investment, but these loans are not more than 13 months in most cases. Who are the players in this all important money market? As you might expect, the banks play a huge role in the investment proceedings.

The money market more than anything else, and this has been the primary impetus for the economy's slowdown. The reason this tightening of the money market has had such a devastating impact is that banks are not able to meet their own obligations. Interest rates on these bank-to-bank loans have gone up and fewer banks have the ability to help each other out in this way. With no paper at their disposal, financial institutions don't have the ability to offer loans to customers that would typically qualify. When there is less money available for the banks to do their business, the trickledown effect means that there will be less money for customers. This has had an impact on not only personal loans, but also on commercial loans.