Make Money
| Money is anything that is generally accepted as payment for
goods and services and repayment of debts. The main uses of money are as a
medium of exchange, a unit of account, and a store of value. Some authors
explicitly require money to be a standard of deferred payment. The dominant
form of money is currency. The term "price system" is sometimes used to refer to methods using commodity valuation or money accounting systems. The word "money" is believed to originate from a temple of Hera, 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. 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). |
Economic characteristics
Money is generally considered to have the following characteristics, which are
summed up in a rhyme found in older economics textbooks: "Money is a matter of
functions four, a medium, a measure, a standard, a store." That is, money
functions as a medium of exchange, a unit of account, a standard of deferred
payment, and a store of value.
There have been many historical arguments regarding the combination of money's
functions, some arguing that they need more separation and that a single unit is
insufficient to deal with them all. One of these arguments is that the role of
money as a medium of exchange is in conflict with its role as a store of value:
its role as a store of value requires holding it without spending, whereas its
role as a medium of exchange requires it to circulate. Others argue that storing
of value is just deferral of the exchange, but does not diminish the fact that
money is a medium of exchange that can be transported both across space and
time. 'Financial capital' is a more general and inclusive term for all liquid
instruments, whether or not they are a uniformly recognized tender.
Types of money
In economics, money is a broad term that refers to any financial instrument that
can fulfill the functions of money (detailed above). Modern monetary theory
distinguishes among different types of monetary aggregates, using a
categorization system that focuses on the liquidity of the financial instrument
used as money.
Commodity money
Commodity money value comes from the commodity out of which it is made. The
commodity itself constitutes the money, and the money is the commodity.[10]
Examples of commodities that have been used as mediums of exchange include gold,
silver, copper, rice, salt, peppercorns, large stones, decorated belts, shells,
alcohol, cigarettes, cannabis, candy, barley, etc. These items were sometimes
used in a metric of perceived value in conjunction to one another, in various
commodity valuation or Price System economies. Use of commodity money is similar
to barter, but a commodity money provides a simple and automatic unit of account
for the commodity which is being used as money.
Representative money
Representative money is money that consists of token coins, other physical
tokens such as certificates, and even non-physical "digital certificates"
(authenticated digital transactions) that can be reliably exchanged for a fixed
quantity of a commodity such as gold, silver or potentially water, oil or food.
Representative money thus stands in direct and fixed relation to the commodity
which backs it, while not itself being composed of that commodity.