WHAT IS MONEY Student Snejana Semenets Group Ez-22

WHAT IS MONEY? Student Snejana Semenets Group Ez-22 c Sumy State University

Money is so much a part of our daily lives that we do not often consider what it is. It is a product of the human imagination, and as a human invention it totally depends on trust. In classic economic theory, money has three basic functions: it is a means of payment, a unit for measuring buying power, and a record of wealth for future spending.

Before money, people could not buy and sell. There was trade; but it had to be two-way trade: people exchanged goods. At different periods of time and in different parts of the world many different commodities have served as money. They were: cattle, sheep, furs, leather, fish, tobacco, tea, salt, alcohol, shells, stones, etc. To serve effectively as money, a commodity should be fairly durable, easily divisible, and portable. None of the abovementioned commodities had all these qualities, and with time they were replaced by precious metals.

In Europe banknotes were first issued by Stockholm Bank in 1661. By the beginning of the 20 th century almost all countries had adopted the gold standard. After World War II, at the Bretton Woods Conference, most countries adopted currencies fixed to the US dollar.

In 1950, the first credit card was made. It was the Diners Club card, and it could only be used in 200 restaurants in New York

Today, most shops, hotels and restaurants in the world take credit cards, so people do not have to carry money with them when they travel. They also use electronic money

What will happen in future? A current trend is the disappearance of different currencies. Another trend sees coins and banknotes becoming unnecessary; we increasingly carry and transfer our wealth with credit cards, smart cards or mobile phones. These tools allow us to make transactions without the use of cash