Articles on money as a medium of exchange

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Category movies: Forex video

Tags: money, medium, exchange, articles money, articles

VOICE NARRATOR: Let us reintroduce money. Articles on money as a medium of exchange. We can show it as a flow. It is not matter or energy such as goods and services -- it flows in the opposite direction. When we exchange goods for goods without money, it is called barter.As we saw, some basic principles of economics occur under barter: Specialization and the gains from trade. Trading costs reduced by the context of rules, such as an institution. -- These things started before the use of money.But: if you have caught fish and I have gathered coconuts, we can trade only if you want coconuts and I want fish. Otherwise, no deal. Barter requires the coincidence of wants.And since there are many people and many different goods, these coincidences are mostly impossible.Money solves the problem as the medium of exchange -- the first of the three main functions of money. Everyone accepts it, for any kind of good or service, including labor.

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