Money- any asset that people are willing to accept in exchange for goods and services or for payment of debts. Barter economies- goods and services are traded directly for goods and services. Double coincidence of wants is required, which is both parties wanting to trade goods. Commodity money- a good used as money that also has value independent of its use as money such as the governor of tennessee"s deer skin salary of 10000 a year or gold. Depedent heavily on purity, which is a problem because people can easily dilute the purity of metals. Fiat money has no value except for the use as money such as paper money which is not backed by any gold. Dollar bills are used because households and firms both have confidence that the money will not lose its value in the time that the money is held. Why do we need money?- by making exchange easier, money allows for specialization and higher productivity.