Humanity so long ago introduced money into use that it seems that they have always been. However, many centuries ago, in conditions of natural exchange, it became difficult for people to equalize supply and demand, so money appeared.
Instructions
Step 1
As the goods of production and population grew, barter became almost impossible. It was then that money was invented, which began to play the role of a temporary intermediary in any transaction. For this system to work, all its participants had to believe in the value of money. The price of any product began to be measured in gold and silver. In tsarist Russia until 1914, each ruble was confirmed by a measure of gold. Uncontrolled emission gradually pushed gold out of the ruble. In the modern world, the gold reserve has long been unable to meet all the needs of the state budget. This function is performed by the so-called credit paper money, which became the progenitors of "electronic" money.
Step 2
The development of new branches of the economy forces the state to constantly introduce additional funds into circulation. Some advance of the money supply (the sum of all cash and non-cash money in the state) relative to GDP (gross domestic product) creates a small financial reserve and stimulates the development of the economy, if at the same time prices and rates are reduced.
Step 3
According to the quantitative theory of money, confirmed in practice, an increase in the money supply leads to an increase in prices, not an economy. Thus, money, not backed by a commodity, entails an increase in prices and a decrease in the cost of living. In Russia, this artificial inflation is regulated by the Central Bank by curbing the money supply (issuing money against the inflow of foreign currency) and increasing the taxation of citizens.
Equilibrium in the financial market is possible when money demand (population demands) and supply (banks' capabilities) are balanced.
Step 4
The money is printed on government orders at the factories of the State Sign, which includes the mint, paper and printing factories. High quality paper provides increased strength (prevention of tearing, breakage) and wear resistance (protection against erasure and burnout) of future bills. Several types of printing are used: offset (creating hydrophilic and hydrophobic films), Orlov (special color transition), high (creating sides), metallographic (creating recesses).
Step 5
Protection against counterfeiting is provided by watermarks, special marks (fibers visible in the range of infrared and ultraviolet radiation), metallized and colored threads.
