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Value Of Money Term Paper

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¶ … Money Its Value? Using objects such as shells, coins, and other things of value to a community or individual has been practiced for thousand of years. If a close enough look could be taken, spending "money" probably started with Adam and Eve. When this exchange of tokens of some sort takes place, the tokens acquire a worth and enable the spender to obtain goods or services.

Money is defined as, "any definite or indefinite object which has value to both parties involved in the transaction." (Webster's New World Dictionary, 2nd College Edition).

Many different goods have been used as money throughout history. Over the centuries, only two commodities, gold and silver, have emerged as money in the free competition of the market, and have displaced the other commodities. In a free market, the medium of exchange is developed by people and their economic interactions. This is what establishes what money is. It is not established by a government calling bits of paper "money." A most important truth is thus established, MONEY IS A COMMODITY! "Learning this simple lesson is one of the world's most important tasks. So often have people talked about money as something much more or less than this. Money is not an abstract unit of account, divorceable from a concrete good; it is not a useless...

It is simply a commodity. It differs from other commodities in being demanded mainly as a medium of exchange." (Morgan, 2002).
The shape of the money unit makes no difference. For example, if copper is used for money, then all copper is money, whether it is a pipe, chunk, bar, coin, or picture frame. This is not to say that some shapes are not more convenient than others. The free market will determine if a coin is to carry a premium over another form of the same metal.

Money is used as a medium of exchange. Whatever is being used for currency in the society being studied has a worth which was placed upon it by the society's members. This exchanging money for goods or services is different from bartering. Bartering involves equal amounts of value of work or goods on both sides of the transaction.

In most cases, the substance used for money had value because of its scarcity, difficulty to obtain, or uniqueness. Gold is mentioned first in the Bible. Abraham "counted out 400 shekels of silver to pay for his wife's burial place.

Through the ages, three metals have a history of monetary usage - gold, silver, and copper; none of which are easily obtainable in nature…

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