For a long time, people used barter to exchange goods, or in-kind exchange, which meant the exchange of one product for another. But in the 7th century BC. began to mint coins to pay for goods. This is how money appeared, as we are used to seeing it.
Instructions
Step 1
Natural exchange was not always possible and required the expenditure of efforts to find a person who had the right product and was ready to exchange it on mutually beneficial terms. When finding a suitable partner, the question arose about the terms of the exchange. Gradually, some goods acquired the function of money (pearls, furs, ingots), and in the 7th century BC. coins appeared.
Money is a measure of the value of goods, they can be exchanged for absolutely any of them. The Russian word "money" itself comes from the Turkic "tenge". Tenge was a silver and later copper coin in eastern countries. Today tenge is the Kazakh currency.
Step 2
There are four main functions of money.
Money represents a measure of value. Various goods and services can be compared and exchanged based on their price, which is their value in money. The second function of money is a medium of circulation, which means the use of money as a medium in the circulation of goods. Their main advantage is the ability to overcome time and space (you can pay before or after receiving the goods in any place the seller can find). The next function is a means of payment, meaning the use of money in registration and subsequent payment of debts. And the last of the main functions of money is a store of value. Thanks to this function, the accumulated money is able to transfer purchasing power into the future.
Step 3
With all the variety of functions, money itself has no value, it cannot satisfy the needs of people. They are useful only if they are exchanged for the goods a person needs. Money turnover is based on trust that money will always fulfill its functions. In the absence of this trust, such a universal equivalent to all goods will lose all value. In this case, monetary relations will come to naught and the world economy will collapse.
