I don't get the concept of money!?

Question

We work hard to get our money right, but money itself isn't good for anything we can't do anything with it. But yet we continue to bust our *** for it. why do we want it and why do bussinesses except it (hard to explain)? Also how do we transfer our money into other currency I mean how is the our economy and other countries currency related?

If you can just clarify the idea behind using money I'd be good U don't really have to answer the specific questions above if you dont want to.

Answer 1

The point of money is that it's a stand-in for other goods. In the early days of civilization, people found they could develop specialized goods if they traded with each other instead of having to produce everything for themselves. However, in a big complicated society, trading goods gets complicated. You don't want to be lugging six dozen eggs around with you, for example, if you want to trade them for a piece of jewelry. So instead the governments started writing notes basically saying "this note means this person is entitled to this many resources." And then the person you trade that note to can go out and use it for something else, so the value isn't lost, just moved around. It simplifies things by allowing anybody to trade with anybody, instead of having to find someone who's interested in the particular goods you're producing.

As for transferring between currencies, that's complicated and I don't fully understand it myself. I'm guessing it has something to do with how many resources different countries have to offer, relative to each other. I.e. how much we're "good for" on a global scale.

Hope this helps. :)

Answer 2

Money is used because it's a medium of exchange.  Let's say you want a cookie, and the person selling the cookie wants a green toothbrush.  If you don't have a green toothbrush, you'll have to first go to someone who has a green toothbrush, and what they want may not be something you have, and you'd have to find someone else, and so on.  It gets to be a real pain.  Money solves this problem because you can use it to buy a cookie, which the seller can use to buy a green toothbrush.  No bartering necessary.

Money may not have any value in itself, but it has value because it's universally accepted as payment.  Therefore, it can be used to buy anything you want, so it's more valuable than receiving specific things, because no one can possibly know all the things that you want.

You transfer currencies through a bank or specific businesses who specialize in currency exchange.  What they do is they go to the currency market and sell your dollars for whichever currency you want.  The exchange rate is determined by the supply and demand for each currency.

Answer 3

money is that good which is most marketable in an economy.  Goods are exchanged in given ratios called prices but when a single good is so valuable that it can be accepted by everyone in an exchange it becomes from that point the money.  Our gov. money used to be worth more however with the death of gold it is true that money is basically worthless pieces of paper whose value is propped up by fiat.  

As for transferring money to other countries the exchange ratio of Dollars and Pounds for instance, is its price by definition. Now imagine of a nation purchases from all the other nations through trade. All the money in the world accumulates in that nation and that nation's money lowers in value.  When this happens it comes about that more of that nation's money can be exchanged for less of the other nation's money.  The price (or exchange rate) is lowered and all the money leaves that country to the others.