Definition of Money
Beginning of money is known as a result of difficulties in the exchange needs. In the past, needs to obtain the desired goods or services used the barter system. This barter system is a system of exchange between goods with goods or goods with services. This system is a first known in the trade world, but was abandoned because of the many obstacles in every exchange.
Some of the constraints in the barter system, among others:
1. It's hard to find people who want to exchange goods in accordance with the requirements.
2. It is difficult to determine the value of goods to be exchanged to items needed.
3. It's hard to find people who want to exchange goods with services they have.
4. Difficult to obtain the desired goods in quick time.
To overcome these obstacles, then the experts think about a tool of exchange that is more effective and efficient. And the medium of exchange is called money. Money is a tool that is used to exchange goods and services and generally recognized in some particular region. Money not only as a medium of exchange, but also has other functions as a unit of account, hoarders of wealth, and as adebt standard.
In modern economy, money plays a very important for all social activities in the community. Money has become a necessity, even becoming one of the determinants of stability and economic progress of a country. To meet the need of money, the government of a country through the Central Bank create money, and keep the money supply remained stable. Distribution of money to the community is through commercial banks.
The benefits of money are:
1. Simplify and accelerate the acquisition of goods and services desired.
2. Facilitate in determining the value of a good or service.
3. Streamlining the process of trade widely.
4. Used as a place of amassing wealth.
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