economy

definition of money

It is called as money to that currency that has legal value, is current and current and is widely used to buy goods, to pay for services, to pay wages to workers, to cancel debts, among other operations.

Currency of legal value and current currency that is used in a nation to pay wages, pay for goods and services, or cancel debts

That is, money is a means of payment for goods, services and obligations, which is accepted and legitimized in a given societyIn other words, there is absolute consensus that money is the way in which the obligations mentioned can be paid.

Means of payment through time and the birth of money

If we go back in time we find that the first objects that were used as a means of payment were metals; the value of these was determined based on the weight they held, while in the 8th century BC. The first silver coins would have been produced and it was the needs of commerce that drove them.

On the other hand, in the city of Rome, it was known to use cattle as a means of exchange.

In the 4th century BC, the Romans minted the first coins made of copper and bronze, in a rounded shape, and the ace was the unit.

In the following century, they would begin to make silver, called denarius, a denomination that would be the antecedent of the word money, which we use widely today.

Later, they would be made of gold.

In modern times, with the rise of commercial activity, money began to acquire an unusual importance, especially after the Industrial Revolution, even, from this moment on, social classes began to be divided according to the money they possessed, The upper classes were the owners of the means of production and of large fortunes, while the lower classes, made up mostly of workers, lived on small wages, which in many cases did not allow them to satisfy their basic needs.

On the other hand, we must say that nowadays the means of payment are not only reduced to cash, which is precisely the most popular denomination, but that other very popular forms are also used, such as: checks, credit and debit cards , bank transfers and the brand new bitcoins.

It is worth mentioning that today, the money that human beings handle in our daily lives, is popularly known as fiat money and it is characterized by being based on the faith of the community in which it circulates, that is, it does not need a specific support such as a precious metal or a jewel.

The Euro, the Dollar, the Real, the Yen and the rest of the currencies that circulate in the countries are considered within this group.

Money requirements

In modern economic systems, money must meet the following conditions: exchange medium (It tends to alleviate the defects of the exchange of goods and avoids, for example, the ineffectiveness of barter, we are interested in acquiring something, then, we take out this or that sum of money and buy it); accounting unit (The value of the good is used to measure and compare the values ​​that other goods present and therefore a reference is taken, for example cows, a piece of land will cost you so many cows); Preservation of value (The good is bought with the intention of storing its commercial value for a future exchange, such is the case of the gold bullion).

But in addition to the conditions indicated, it is necessary that a competent and definitive entity that issues it, endorses the money that circulates and that we use.

Although it is the government of a nation that will indicate the legal tender, entities such as the Central Bank and the Mint They will be especially concerned with its control and regulation.

Set of assets owned by a person

On the other hand, the word is also used to designate the set of assets that a person has, that is, his fortune or wealth.

We have money, that trip will not affect family finances.”

Black money: that which circulates without being declared

For its part, it is called black money to those banknotes that are legal tender but circulate without being declared to the corresponding tax agency.

Normally it comes from commercial activities that are carried out outside the current law.

There are several synonyms and names for this term that also have to do with the place in the world in which one is, among them the following stand out: quarters, silver, twine, cash, pasta.

Finally, we cannot ignore the relevance that people attribute to the possession or not of money, although the most spiritual and romantic tend to say that money comes and goes and that the most relevant are other issues such as love or health, which for It is true, most of us usually consider others based on the money they have or not, and this will make them more or less powerful of course, because in society the belief that the availability of money facilitates many actions predominates Not to mention the possibility of being able to keep needs of any kind satisfied.

For many people, therefore, money guarantees peace of mind in many respects.