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Function Of Money Essay

1099 Words5 Pages

Money is the oldest and most important invention of civilization,and it is the base for trade.Money is a social institution,which society has given it.This tool was created to perform money transactions.In the early ages,the transactions were physically realized by clearing.When a person who changed the subject of farming with a livestocker.So the animal is given an agricultural product in an equivalent manner.People were in touch with people who have things that they need. Money has passed through many processes until it becomes what we use today.In the history of money,there are many different shapes like barter,metal and gold,leather,sea shell. Barter is the exchange of mutually beneficial services and products.The system extends back to the birth of people,lagging tens of thousands of years.Today,there are still individuals,organizations and governments using this system for service and product.In the following years Barter system entered cows,sheep,camels and other animals in pairs.With the …show more content…

Another function of money is that it is a common value measure.It was not possible to make a comparison between the goods in the exchange market.There was no common criterion.Money is used as a measure when measuring value of goods and services.In addition relative values of products and services can be easily found when a common measure is used. Finally,money is used as a means of store of value.The most convenient tool is the money for wealth storage.Due to storage,the selected commodity must be suitable for storage without deterioration.For this reason,gold was popular for money in ancient

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