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what is money really? - Coggle Diagram
what is money really?
a world without money
barter economy
every exchange happens trough goods and services
challenges
difficulty in meeting specific needs
solution
Money eliminates the need to find "the right person."
It allows exchanges in a market using a "medium of exchange
problem
finding the right person to trade with
types of money
cacao beans, salt, cows
limits of some goods
fragility and short lifespan
lack of uniformity
properties of money
ideal examples
advantages
difficult to obtain, stable value and easily divisible
precious metals like gold and silver
essential characteristics
Maintains value over time.
Divisible into standardized units.
Widely accepted.
banknotes and fiat money
Introduction of banknotes:
Avoid the weight of carrying gold or silver.
Allow exchanges through bank receipts.
fiat money
Not linked to physical goods like metals.
Its value depends on societal agreement.
Regulated by independent central banks to prevent inflation.
plays a central role in modern society