Money, inflation , unemployment and interest rates

By Zewelanji Sichone

MONEY: in simple terms is defined as anything that is generally accepted as a medium of exchange or payment of goods and services. 

Money serves as a medium of exchange, store of value and as a unit of account.

Money facilitates transactions. In order for it to be a medium of exchange it must hold value over time.

Money functions as a unit of account. It provides a common measure of the value of goods and services, enabling the seller and buyer determine the price.

INFLATION: is defined as the decline in purchasing power of a given currency over time. Inflation reflects the rise in the cost of living. 

It reduces the purchasing power of a currency and leads to a rise in prices of goods and services. 

UNEMPLOYMENT Simply refers to a state in which individuals are seeking for a job but are unable to find a job.

Unemployment contributes increase in poverty levels,  crime, sickness and disease,   decay in moral standards to mention but a few.

INTEREST RATES: in simple terms, interest is a payment made by a borrower to the lender for the money borrowed. Therefore, Interest rate is the amount a lender charges for the use of assets expressed as a percentage of the principal.