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Money

Money is a special kind of good. It does not meet any human needs and wants and therefore has no value itself. It gains its value when it is exchanged for goods which can satisfy people´s needs. Historically, different things were used as money. This form of payment was difficult to carry out and so commodity money was replaced by money as we know it today. Each country has its own monetary system and currency. Historical trends in payments have resulted in the development of different forms of money (cash and cashless) including the Euro as a single European currency.

Throughout history money had different forms. Originally, when barter trade was common, so called commodity money was used. Different things served this function, e.g. cattle, metal, salt, shells, etc. These were replaced by cash money in the form of coins and banknotes. Current developments show an increasing tendency to use cashless money in the form of bank accounts or different cheques or cards.

Money has different functions.
It serves as a medium of exchange, that is all goods and services can be exchanged for money.
As a measure of value, money expresses the value of all goods and services and so the relative values can be compared.
Money serves as a standard of deferred payments so the goods or services can be bought now and paid later (debt).
Being a store of value means, that products can be sold in the future without losing their value. This function, however, can be performed by other assets, e.g. buildings, land, artwork.

Money plays an important role in the economies of countries. It is an important tool of financial stability within countries and the worldwide economy as well. It is closely connected to the quantity of goods in the economy and the inflation rate.

The Czech currency is the Czech Crown (CZK). For accounting purposes the currency is divided into 100 hellers, however these are not used anymore for cash payments.

The European currency is the Euro which is divided into 100 cents.