Classification of Banks

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According to MANKIW N. Gregory (2007) Money is defined as any item or verifiable record that is generally accepted as payment for goods and services and repayment of debt in a particular country or socio-economic context, or is easily converted to such a form. The main function of money is distinguished as: a medium of exchange; a unit of account; a store of value; and some times, a standard of deferred payment. Any item or verifiable record that fulfils these functions can be recorded money. Some people have tried to defined money in purely legal term contending that “money is what the law says it is” Legal provision certainly relevant a “thing” is likely to have difficulty in achieving general acceptability in payment, if the law prohibit it is use for this purpose, although violation of such lows are for from unknown, Laws can also help a thing to achieve general acceptability by proclaiming it to be money. Moreover, legal definition of money is not satisfactory for purpose of economic analysis, people may refuse to accept things that are legally defined and may refuse to sell goods and services to those who offer legal tender in payment Moreover, things that are not legally defined as money come to be acceptable in payment and even to become a major party of circulating medium (M. Stephen, Goldfield, 1817:12-14)