What is Money?
Everyone uses money and knows what it is. We are motivated by money and we all try to get it for whatever reason. If we look at the value and role of money in the local and global economics, we can find definition and strict guidance on its value, use and limitations. Money is, however, a mechanism that controls cultural and social relations within the country as well as between different states.
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Before the development of monetary relationships, people used barter in order to exchange and “buy” various goods from each other. Barter was a good alternative until people started to develop entrepreneurship mindset and tried to find the way to make their exchange tools transferable and unified across different barter deals. First, people replaced barter with commodity money that can be considered as the first attempt to introduce currency, which laid foundation for the economic relations. The value of money is the sum of the individual values of goods and services produced in the country. With that in mind, monetary mechanism is self-limiting, as printing money will neither generate wealth to the country, nor will it benefit capital holders.
In the modern world almost all the countries have their own currencies, which, therefore, have also become a commodity and can be traded on the international market. The variety of currencies is determined by the need to differentiate countries on the global market, at the same time unifying internal monetary relationships. To manage and control the performance of the global economics and contributions and effect of its individual participants on the development, various international financial and economic institutions were established and a set of rules and guidance were agreed upon on the international arena.