Money

What is Money?

When people think of money, the main thoughts are usually how to get more, how to protect what one already has, and how to make good decisions about its use. Money is something that is at least a secondary thought to many of the decisions that we make in life.

Money is a “medium of exchange.” It is one of the greatest philosophical concepts in history. The use of money enables the exchange of goods and services that cannot occur with bartering to occur. When money changes hands, the premise behind the exchange is that it is voluntary and for the purchase of goods or services. An exchange will not occur if both participating parties are not sharing the view that there is a benefit to the exchange. Money is considered superior to the use of the bartering system because the same value is placed on the monetary value but the item being used in the bartering exchange would have different value to both parties (What is Money?).

Money is superior to the bartering system because a particular person looking for a particular good does not need to be found for an exchange to occur. Instead, there only needs to be a market in which services or goods can be sold. Individual goods are not sold. Rather, money is used as a common means of exchange. One provides a good or service and the recipient pays for the good or service with money rather than trying to find another good or service with which to trade. In turn, the person who provided the original good or service, who has received money in return, can then use that money to acquire a good or service for him or herself and again does not need to find someone looking to exchange a particular good or service. This ability to provide the same good or service multiple times to a variety of people led to a specialization of products and services provided by people (Asmundson, 2012).

The use of money has shaped the world in which we live today. Because of this more uniform method of exchange, a division of...