Economy-Problem?

Question

Near money, money sbustitute, fiat money and what function each type of money serves.

please help thank you

Answer 1

Near money; Has value but is not money. Stocks , bonds, for example. Must be easily and quickly liquidable (convertable) into money.

Money substitute; That's what we use, a note valued as money, but still just a symbol of value. AND/OR articles used in trade other than money.  lbs of grain, barrels of oil. Some cultures used clam shells and or beads. Coins or tolkens. It is supposed to be backed by real money.

Fiat money; Has no real value, is just declared to have value. ie. declaired to be of value by FIAT (government order).