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Most people
use money every day. It is so common they many people rarely think about why
money is important and what gives it value. In general, money is any item that
is widely accepted as payment for products. It is something people see and use
almost every day. Though money is commonplace, its forms and functions are
complex. The familiar paper bills and metal coins are only two of the forms
money can take. In the past, many things served as money - beads, shells,
cattle and even slaves. Precious metals, especially gold and silver, have been
a favorite form of money. Some of the things used as money - fishhooks or cattle,
for example - also have had value as consumer goods. Most of the items used as money,
however, have had value only because people agreed that they could be exchanged
for goods and services. In other words, what is used as money often has little
value of its own. Its value comes from the product for which it can be
exchanged.

In most
modern economies money serves several functions. As a means of exchange money
is used to trade for goods and services. Less complex societies often do not
use money at all. They simply barter, or trade, one product for another. Two
farmers may trade a bushel of wheat for a jar of milk, for example. The more
complex a country’s economy, the harder it is to use a system of trading one
good for another. Money is the answer to that problem.

As a store
of value people use money to save their wealth for the future. Storing goods is
not so easy as storing money. Many goods, such as food, spoil quickly. Other,
such as cars, take up a lot of space. But money can be kept in a bank or a safe
or a pocketbook until it is needed. 

Most people use money every day. In general, money is any item thatis widely accepted as payment for products. The morecomplex a country’s economy, the harder it is to use a system of trading onegood for another. As a store of value people use money to save their wealth for the future. But money can be kept in a bank or a safeor a pocketbook until it is needed.