The Development of Modern Money

Banks

A few hundred years later, people began to specialize into doing specific jobs. As a result they need to trade what they have, for what they didnt have.As a result, goldsmiths developed metal coins to make trading easier.Bartering of everyday items(e.g) shells, kumara.

At last, paper money was developed. It had many qualities that changed the accessiability and functions of money forever.

A medium of exchange-Enables trade to occur without the need for barter

A standard of value (unit of account)-Money enables us to compare the values of goods and services

A store of value-money can be kept (saved) and used for later.

A means of deferred payment-this means you can buy now and pay later

Portable -easy to carry

Durable-lasts a long time

Divisible -divided into different amounts ($1, $5 , $10.)

Homogenity-recognized by shape, color and size-not easily forged and users know its money

Acceptable -in exchange for a range of goods and services

Scarce-has value because its not easy to make/find.

Stable in Value-value does not change much overtime, unless theres a lot of inflation.

People were beginning to like the idea of money. People began to had lots of it, so they started storing them in places that were not ideal.They would end up forgetting or loosing the money.Hence, the development of banks to store money overcame this problem,In the beginning, people were self-sufficient and independent. They produced what they needed by themselves. As a result, they used everyday items such as kumara and shells, to trade with others for the other things that they required.Modern Paper Money Characteristics of Modern MoneyFunctions of Modern MoneyGoldsmiths and metal coins