Premium Essay


In: Business and Management

Submitted By piscestonya
Words 543
Pages 3
1. History of Money. Discover how money made progress possible.
2. Why history of money matters Money changed the world through division of labor and specialization. Money is the foundation of progress. Money IS Power! - the power to evolve mankind, but we have to set money continue enjoying the benefits.
3. Why money was invented To make life easier. :) With money we are able to buy a wider variety of goods than before - in the barter economy - where one good is directly trader for another. And expand time - we can save money for future use, wait for a better opportunity
4. What is Money? Medium of Exchange - a commodity that is valued and demanded for its own use, before becoming used as money. • Store of Value - a benefit of money - being able to store the products of our labor. • Unit of Account - another benefit - being able to make business calculation.
5. How money originated At first people traded directly one good for another - barter economy. Then some goods were used as medium of exchange to obtain other goods - indirect exchange. Today we are still using a sophisticated form of indirect exchange.
6. Barter exchange Barter means that one good is directly exchanged for another. For example, a fisherman may exchange a bucket of fish for 50 eggs. Limitations are that the scope of goods to trade for is very limited. For instance, it can be harder to find a willing buyer for a violin than bread. And the time of trade is limited - I can not be sure that my fresh fish will be demanded in the future.
7. Indirect exchange Money allowed to trade a wider variety of goods. Now a violin maker could exchange his violins for money and then buy whatever he needed. He no longer had to convince a shoe-maker to trade shoes for violin. Money could be saved for later use, for a better trade opportunity. Thus freeing up time for innovation and specialization - resulting in…...

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