Reference no: EM133094154
Discussion: When we visualize the word ‘money', we typically think of the bills and coins in our wallet or the plastic card we swipe at the cash register. However, the intangible value we place on the objects we refer to as such is not explained by this visualization. A better description is needed to honestly define the nature of ‘money'. At its base, the word is used to describe any generally accepted means of payment (Lee, M., & David, C, 2021, p. 567). It has several implications as well-for something to be considered as money, it must have the ability to function as a medium of exchange, a unit of account, and a store of value. Medium of exchange simply refers to a widely accepted object or unit, generally stable in value, that can be traded in smaller or greater quantities for any good or service.
When money is used as a unit of account, it compares the value of different goods through the standard of the goods' equivalent worth in terms of the money. Money's third vital function, storing value, is its ability to hold personal or corporate wealth in a mostly stable medium. Barter is a different, more whimsical form of exchanging goods and services, subject to the desires of individuals.
A bushel of apples is not always exchangeable for three chickens in the barter system; in other situations, not even half a bushel of apples is required for three chickens. In short, barter relies on the measure of an item's value by the principle of "it's worth what someone will pay for it". Currency systems, on the other hand, use an agreed-upon form of money as a system of exchange instead of direct barter (Hall, 2021).
Nearly anything can be used as money if people are willing to accept it in return for their goods and services. For example, since the early 1960s, the Canadian Tire Company has issued store credit certificates that have been accepted by other local Canadian businesses for years (Walsh, 2016). These certificates can be considered a limited form of money due to their acceptance in many places in Canada. While money has certainly made trade simpler for us, it has taken away the excitement of marketplace haggling, and with it, the experience needed to better understand and value what we own. The incredible simplicity of exchanging money is almost too easy, allowing us to tend toward habits of squandering, waste, and risks. The Lord has charged us with responsibility in our finances, and, lest we slip into these habits, we must turn to him for wisdom in our business. As put by Solomon in Proverbs 17:16, "Why should fools have money in hand to buy wisdom, when they are not able to understand it?" We cannot allow the raw power of our money to go to our heads; seeking guidance from God is the only solution to successful management of our personal commerce. Hall, M. (2021, September 8).
Barter system vs. currency system: What's the difference?
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