Functions of Money
Money can be an item or a record that is accepted to act as payment for the provision of any good or service. It is used for any socioeconomic purpose in any country and is also used as a way to repay debts. Currency in a particular country can be in the form of coins or notes that are used as a supply of money. Money has its origins attributed to Rome where it is believed to have originated from a temple. Money has also evolved and has had its history. In the ancient times, people traded by exchanging good for example a particular grain with other types of grains. This was called barter trade. People would even exchange grains with animals or with their daughters, especially in Africa.
Commodity money was then introduced to be an item of exchange of goods and services in trade from Mesopotamia. Commodity money involved the use of gold and silver coins to carry out business. These coins were being used as commodity money then evolved to another system which was called representative money. Banknotes were then introduced to replace gold coins as a medium of exchange. They were first used in China and then introduced to other parts of the world such as Europe through tourists. The banknotes were then made legal, and a gold standard was introduced in such a way that the paper notes would be exchanged with the same quantity of gold. Know about apr interest calculator here!
Money has four main functions that include being a medium of exchange, a measure of value that is common and can be accounted for, a store of value and a standard of value that means that one can pay debts by use of money. As a medium of exchange, this means that money can be used to exchange for goods and services and therefore can solve the problem of barter trade that was used in ancient times. One of the problems of batter trade was that traders would have common wants at times that made it difficult to trade at times. Money has a function to measure value and worth of an individual or a country depending on transactions and account systems. Learn about apy interest calculator here!
The worth is also determined by considering if one or a country is in debt with others and measures the standard of it. A store of value as a function of money indicates that money can be saved when there is plenty and be stored then used at a later date when one is in need. This is called retrieving the money, and it still has value even in future when one needs to use it. For more information about money, go to https://www.youtube.com/watch?v=BtbfbuFkuE8.