| | '''Money''' is defined as something which serves as a means of exchange, a store of value, and a unit of account and represents only an extremely small fraction of the real wealth of any given society or [[country]] where it is used. The [[currency]] which serves as money may be backed by some tangible commodity, such as the [[gold standard]], or may be [[fiat money]], such as [[Federal Reserve]] notes. Alternatively, trade may be carried on using commodity pay, wherein existing commodities are assigned exchange values but not explicitly designated as money. | | '''Money''' is defined as something which serves as a means of exchange, a store of value, and a unit of account and represents only an extremely small fraction of the real wealth of any given society or [[country]] where it is used. The [[currency]] which serves as money may be backed by some tangible commodity, such as the [[gold standard]], or may be [[fiat money]], such as [[Federal Reserve]] notes. Alternatively, trade may be carried on using commodity pay, wherein existing commodities are assigned exchange values but not explicitly designated as money. |
| | The earliest discovered forms of money were easily-carried items with some inherent value, such as [[salt]] (used in ancient [[Rome]]) and fishhooks (used by [[American Indians]]). This replaced or supplemented pre-existing [[barter]] systems. Precious metals, such as [[copper]], [[gold]], and [[silver]], have made good coins, being both easily transportable and having inherent value. In 1933, the [[United States]] abandoned the [[gold standard]]<ref>[http://www.u-s-history.com/pages/h753.html The Gold Standard]</ref>, switching over to [[fiat currency]], which has no inherent value beyond the government's assurance that it has value. | | The earliest discovered forms of money were easily-carried items with some inherent value, such as [[salt]] (used in ancient [[Rome]]) and fishhooks (used by [[American Indians]]). This replaced or supplemented pre-existing [[barter]] systems. Precious metals, such as [[copper]], [[gold]], and [[silver]], have made good coins, being both easily transportable and having inherent value. In 1933, the [[United States]] abandoned the [[gold standard]]<ref>[http://www.u-s-history.com/pages/h753.html The Gold Standard]</ref>, switching over to [[fiat currency]], which has no inherent value beyond the government's assurance that it has value. |