Money is any object that is generally accepted as payment A payment is the transfer of wealth from one party to another. A payment is usually made in exchange for the provision of goods, services or both, or to fulfill a legal obligation for goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility. It is often used when referring to a Goods and Services Tax and repayment of debts Debt is that which is owed; usually referencing assets owed, but the term can also cover moral obligations and other interactions not requiring money. In the case of assets, debt is a means of using future purchasing power in the present before a summation has been earned. Some companies and corporations use debt as a part of their overall in a given country or socio-economic context.[1][2] The main functions of money are distinguished as: a medium of exchange By contrast, as William Stanley Jevons argued, in a barter system there must be a coincidence of wants before two people can trade – one must want exactly what the other has to offer, when and where it is offered, so that the exchange can occur. A medium of exchange permits the value of goods to be assessed and rendered in terms of the; a unit of account A unit of account is a standard monetary unit of measurement of the market value/cost of goods, services, or assets. It is one of three well-known functions of money. It lends meaning to profits, losses, liability, or assets; a store of value A recognized form of exchange can be a form of money or currency, a commodity like gold, or financial capital. To act as a store of value, these forms must be able to be saved and retrieved at a later time, and be predictably useful when retrieved; and, occasionally, a standard of deferred payment A standard of deferred payment is the accepted way, in a given market, to settle a debt – a unit in which debts are denominated. It is one of the defining functions of money; for example, while the gold standard reigned, gold or any currency convertible to gold at a fixed rate constituted such a standard. As of 2010, the US dollar and the euro.[3][4]
Money originated as commodity money Commodity money is money whose value comes from a commodity out of which it is made. It is objects that have value in themselves as well as for use as money, but nearly all contemporary money systems are based on fiat money The term derives from the Latin fiat, meaning "let it be done", as the money is established by government decree. Where fiat money is used as currency, the term fiat currency is used. Today, most national currencies are fiat currencies, including the US dollar, the euro, and all other reserve currencies, and have been since the Nixon.[3] Fiat money is without intrinsic use value Use value or value in use is the utility of consuming a good; the want-satisfying power of a good or service in classical political economy. In Marx's critique of political economy, any labor-product has a value and a use-value, and if it is traded as a commodity in markets, it additionally has an exchange value, most often expressed as a money- as a physical commodity, and derives its value by being declared by a government to be legal tender Legal tender or forced tender is an offered payment that, by law, cannot be refused in settlement of a debt, and have the debt remain in force. Currency is the most common form of legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private".
The money supply In economics, the money supply or money stock, is the total amount of money available in an economy at a particular point in time. There are several ways to define "money," but standard measures usually include currency in circulation and demand deposits of a country consists of currency In economics, the term currency can refer to a particular currency, for example Pound Sterling, or to the coins and banknotes of a particular currency, which comprise the physical aspects of a nation's money supply. The other part of a nation's money supply consists of money deposited in banks , ownership of which can be transferred by means of (banknotes and coins) and demand deposits A demand deposit or bank money refers to the funds held in demand deposit accounts in commercial banks. These account balances are considered money and usually form the greater part of money supply or 'bank money' (the balance held in checking accounts A transactional account is a deposit account held at a bank or other financial institution, for the purpose of securely and quickly providing frequent access to funds on demand, through a variety of different channels. Because money is available on demand these accounts are also referred to as demand accounts or demand deposit accounts and savings accounts Savings accounts are accounts maintained by retail financial institutions that pay interest but cannot be used directly as money . These accounts let customers set aside a portion of their liquid assets while earning a monetary return). These demand deposits A demand deposit or bank money refers to the funds held in demand deposit accounts in commercial banks. These account balances are considered money and usually form the greater part of money supply usually account for a much larger part of the money supply than currency.[5][6] Bank money A demand deposit or bank money refers to the funds held in demand deposit accounts in commercial banks. These account balances are considered money and usually form the greater part of money supply is intangible and exists only in the form of various bank records. Despite being intangible, bank money still performs the basic functions of money, being generally accepted as a form of payment.[7]
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History
A 640 BC one-third stater The stater was an ancient coin used in various regions of Greece electrum Electrum is a naturally occurring alloy of gold and silver, with trace amounts of copper and other metals. It has also been produced artificially. The ancient Greeks called it 'gold' or 'white gold', as opposed to 'refined gold'. Its color ranges from pale to bright yellow, depending on the proportions of gold and silver. The gold content of coin from Lydia Lydia was an Iron Age kingdom of western Asia Minor located generally east of ancient Ionia in the modern Turkish provinces of Manisa and inland İzmir. Its population spoke an Anatolian language known as Lydian. Main article: History of money Many items have been used as commodity money such as naturally scarce precious metals, cowry shells, barley, beads etc., as well as many other things that are thought of as having valueThe use of barter Barter is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. It is usually bilateral, but may be multilateral, and usually exists parallel to monetary systems in most developed countries, though to a very limited extent. Barter usually replaces money-like methods may date back to at least 100,000 years ago, though there is no evidence of a society or economy that relied primarily on barter.[8] Instead, non-monetary societies operated largely along the principles of gift economics In the social sciences, a gift economy is a society where valuable goods and services are regularly given without any explicit agreement for immediate or future rewards (i.e. no formal quid pro quo exists). Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community. The organization of a gift. When barter did occur, it was usually between either complete strangers or potential enemies.[9]
Many cultures around the world eventually developed the use of commodity money Commodity money is money whose value comes from a commodity out of which it is made. It is objects that have value in themselves as well as for use as money. The shekel Shekel , is any of several ancient units of weight or of currency. The first usage is from Mesopotamia around 3000 BC. Initially, it may have referred to a weight of barley (the first syllable "she" was Akkadian for barley[citation needed]). This shekel was about 180 grains (11 grams or .35 troy ounces) was originally a unit of weight, and referred to a specific weight of barley Barley is a cereal grain derived from the annual grass Hordeum vulgare, which was used as currency.[10]. The first usage of the term came from Mesopotamia Mesopotamia is a toponym for the area of the Tigris-Euphrates river system, largely corresponding to modern-day Iraq, as well as some parts of northeastern Syria, southeastern Turkey, and southwestern Iran circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money Shell money is a medium of exchange that was once common. It consisted either of whole sea shells or pieces of them which were worked into beads or otherwise artificially shaped. The use of shells in trade began as direct commodity exchange, the shells having value as body ornamentation. The distinction between beads as commodities and beads as – often, the shells of the money cowry Cowry, also sometimes spelled cowrie, plural cowries, is the common name for a group of small to large marine gastropods in the family Cypraeidae. The word cowry is also often used to refer to the shells of these snails (Cypraea moneta L. or C. annulus L.). According to Herodotus Herodotus was an ancient Greek historian who lived in the 5th century BC (c. 484 BC – c. 425 BC). He was born in Caria, Halicarnassus (modern day Bodrum, Turkey). He is regarded as the "Father of History" in Western culture. He was the first historian known to collect his materials systematically, test their accuracy to a certain, the Lydians Lydians were the inhabitants of Lydia, a region in western Anatolia. Their capital was at Sfard or Sardis. Being essentially an Iron Age people, their recorded history of statehood, which covers three dynasties, reached the height of its power and achievements during the 7th and 6th centuries BC, a time which coincided with the demise of the power were the first people to introduce the use of gold and silver coins Silver coins are possibly the oldest mass form of coinage in recorded history. Silver has been used as a coinage metal since the times of the Greeks. Their silver drachmas were popular trade coins.[11] It is thought by modern scholars that these first stamped coins Coins are usually metal or a metallic material and sometimes made of synthetic materials, usually in the shape of a disc, and most often issued by a government. Coins are used as a form of money in transactions of various kinds, from the everyday circulation coins to the storage of large numbers of bullion coins. In the present day, coins and were minted around 650–600 BC.[12]
The system of commodity money Commodity money is money whose value comes from a commodity out of which it is made. It is objects that have value in themselves as well as for use as money eventually evolved into a system of representative money According to economist William Stanley Jevons , representative money arose because metal coins often were "variously clipped or depreciated" during use, but using representations for the value stored in banks ensured its worth. He noted that paper and other materials have been used as representative money.[citation needed] This occurred because gold and silver merchants or banks would issue receipts to their depositors – redeemable for the commodity money Commodity money is money whose value comes from a commodity out of which it is made. It is objects that have value in themselves as well as for use as money deposited. Eventually, these receipts became generally accepted as a means of payment and were used as money. Paper money or banknotes A banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. Along with coins, banknotes make up the cash or bearer forms of all modern fiat money. With the exception of non-circulating high-value or precious metal commemorative issues, were first used in China China is seen variously as an ancient civilization extending over a large area in East Asia, a nation and/or a multinational entity during the Song Dynasty The Song Dynasty was a ruling dynasty in China between 960 and 1279; it succeeded the Five Dynasties and Ten Kingdoms Period, and was followed by the Yuan Dynasty. It was the first government in world history to issue banknotes or paper money, and the first Chinese government to establish a permanent standing navy. This dynasty also saw the first. These banknotes, known as "jiaozi Jiaozi is a form of banknote which appeared around 10th century in the Sichuan capital of Chengdu, China. Most numismatists generally regard it as the first paper money in history, a development of the Chinese Song Dynasty (960 - 1279 AD)" evolved from promissory notes A promissory note, referred to as a note payable in accounting, or commonly as just a "note", is a contract where one party makes an unconditional promise in writing to pay a sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms. They differ from IOUs in that that had been used since the 7th century. However, they did not displace commodity money, and were used alongside coins. Banknotes were first issued in Europe by Stockholms Banco Stockholms Banco in Sweden was the first European bank to print banknotes. The bank was founded in 1657 by Johan Palmstruch and began printing banknotes in 1661. It was to be the precursor to the Sveriges Riksbank, the central bank of Sweden in 1661, and were again also used alongside coins. The gold standard The gold standard is a monetary system in which the standard economic unit of account is a fixed weight of gold. There are distinct kinds of gold standard. First, the gold specie standard is a system in which the monetary unit is associated with circulating gold coins, or with the unit of value defined in terms of one particular circulating gold, a monetary system The current trend, however, is to use international trade and investment to alter the policy and legislation of individual governments. The best recent example of this policy is the European Union's creation of the euro as a common currency for many of its individual states. Modern currencies are not linked to physical commodities and are not a where the medium of exchange are paper notes that are convertible into pre-set, fixed quantities of gold, replaced the use of gold coins as currency in the 17th-19th centuries in Europe. These gold standard notes were made legal tender Legal tender or forced tender is an offered payment that, by law, cannot be refused in settlement of a debt, and have the debt remain in force. Currency is the most common form of legal tender, and redemption into gold coins was discouraged. By the beginning of the 20th century almost all countries had adopted the gold standard, backing their legal tender notes with fixed amounts of gold.
After World War II Albania · Australia · Austria · Azerbaijan · Belarus · Belgium · Brazil · Bulgaria · Burma · Cambodia · Canada · Ceylon (Sri Lanka) · Channel Islands · China · Czechoslovakia · Denmark · Dutch East Indies · Egypt · Estonia · Finland · France · Germany · Gibraltar · Greece · Greenland · Hong Kong · Hungary · Iceland ·, at the Bretton Woods Conference The United Nations Monetary and Financial Conference, commonly known as Bretton Woods conference, was a gathering of 730 delegates from all 44 Allied nations at the Mount Washington Hotel, situated in Bretton Woods, New Hampshire to regulate the international monetary and financial order after the conclusion of World War II, most countries adopted fiat currencies that were fixed to the US dollar The United States dollar is the official currency of the United States. The U.S. dollar is normally abbreviated as the dollar sign, $, or as USD or US$ to distinguish it from other dollar-denominated currencies and from others that use the $ symbol. It is divided into 100 cents. The US dollar was in turn fixed to gold. In 1971 the US government suspended the convertibility of the US dollar to gold. After this many countries de-pegged their currencies from the US dollar, and most of the world's currencies became unbacked by anything except the governments' fiat of legal tender.
Etymology
The word "money" is believed to originate from a temple of Hera Hera was the wife and one of three sisters of Zeus in the Olympian pantheon of classical Greek Mythology. Her chief function was as the goddess of women and marriage. In Roman mythology, Juno was the equivalent mythical character. The cow, and later, the peacock were sacred to her. Hera's mother was Rhea and her father, Cronus, located on Capitoline, one of Rome's seven hills. In the ancient world Hera was often associated with money. The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located.[13] The name "Juno" may derive from the Etruscan goddess Uni (which means "the one", "unique", "unit", "union", "united") and "Moneta" either from the Latin word "monere" (remind, warn, or instruct) or the Greek word "moneres" (alone, unique).
In the Western world, a prevalent term for coin-money has been specie, stemming from Latin in specie, meaning 'in kind'.[14]
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CBS News He told "Meet the Press" recently that "I'm very much in favor of tax cuts, but not with borrowed money ." Dave Campbell, whose taxes as small business owner ... How to fix Social Security in one graph Washington Post (blog)
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truth Do we change our investment portfolio Do we change our personal spending habits Why or why not The economy is complex and there are many factors involved such as food energy and commodities prices currency valuations job creation inflation and the list goes on But who really looks at the macro economic data and reports and bases any significant financial
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Chapter 6 (What is Money?): What is a dollar? Sure, it allows us to buy things like food, cars, and iPods; yet, most of us don't really ... youtube.com.
