27.1 What is Money?

MyEconLab Concept Video

Money, like fire and the wheel, has been around for a very long time. An incredi­ble array of items has served as money. North American Indians used wampum (beads made from shells), Fijians used whales’ teeth, and early American colonists used tobacco. Cakes of salt served as money in Ethiopia and Tibet. What do ­wampum, whales’ teeth, tobacco, and salt have in common? Why are they exam­ples of money? Today, when we want to buy something, we use coins or notes (dollar bills), write a check, send an e-check, present a credit or debit card, or use a smartphone app. Are all these things that we use today money? To answer these questions, we need a definition of money.

Definition of Money

Money is any ...

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