How Does Money Change Over Time

Money changed a lot over time. In the beginning, people used shells, knives, animal fur, or other things that they could make or collect. They traded them for

things that they wanted. This wasn’t always fair. Sometimes you gave something more valuable than the thing that you wanted.

Later, people used coins to pay for things. That was easier, because people knew how much the coins were worth.

And now, we have money that is produced by the government. The number on it states how much it is worth. Our money isn’t worth as much as the value that it represents. It is very easy to pay like that, because everybody knows exactly what something is worth.

Money can be used for many different things.

It can serve as a store of value. That means

that people can save it, and use it later, when they need it. People can take their money to the bank and store it there. When they need their money, they can go back to the bank and get it.
It can serve as a unit of account. That means it’s a measurement of value. It represents the real value (cost) of a product or a service. You can use it to value goods and services, record debts, and make calculations. For example, a woman is in the city and sees that one store sells very nice red boots. She really wants to buy them, so she walks into the store and asks the cashier how much they are. The cashier tells her that they are $80. Now, the woman has to decide if she thinks that the boots are worth $80. She uses money as a unit of account to decide, if she should buy the thing likes.
It can also serve as a medium of exchange. That means that people can use it to get other things. For example, a man goes to a store and buys an umbrella. The umbrella costs $10. When he pays, he gives the cashier a $10 bill and gets the umbrella. He used his money as a medium of exchange.
Money is different in other countries. The United States have the dollar, Germany has the euro, Poland uses zloty, and the United Kingdom uses pound. Also, rich countries sell goods and services for a higher price than poor countries. A bracelet is more expensive in Germany than in Bosnia, because Germany is a richer country than Bosnia, and the people there have more money.