Money & Banking

Before money existed, people traded by barter: swapping one good directly for another. Barter only works when there is a double coincidence of wants, meaning each person has exactly what the other wants and wants exactly what the other has. That is rare, so barter is slow and clumsy. Money solves the problem by acting as something everyone is willing to accept in exchange.

Money is anything that is widely accepted as a means of payment for goods and services and in settlement of debts.