Short Essay on “Money” (275 Words)

Money is a wonderful invention of man. In the primitive-society human needs were simple and limited. In course of time ‘Barter system’ prevailed and commodity to commodity exchange came into existence. So, direct exchange of goods for goods is known as barter system. With the passage of time and growth of civilisation, human wants multiplied.

Neither it was possible to be self-sufficient nor was it possible to carry on exchange through the barter system. The importance of money stems from the fact that it does away with the main inconveniences of barter system.

Money came into picture to facilitate exchange. Now-a-days, we realise the significance of money in the field of consumption, production, exchange, distribution and public finance.


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Now-a-days, commodities are exchanged for money and with that money we can have the commodities (or services) we require (it is known as C-M-C exchange system).

However, direct exchange of goods for goods (barter system) continued for a pretty long period of time. People experienced the difficulties of barter system. The difficulties of barter system like;

1. Lack of double coincidence of wants;


2. Lack of common measure of value;

3. Difficulty of sub-division;

4. Absence of store of value and

5. Difficulty in transfer of value paved the way for the invention of money.


Money plays a crucial role in the determination of income, output, employment, general price level and it is significant in the field of consumption, distribution, exchange, public finance etc.

So it is worthwhile to know the meaning of money. To have a clear-cut idea on money, let us examine some of the definitions given by different economists from time to time.