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american money png Money makes the world go around. Economies rely on the exchange of money for products and services. Economists define money, where it comes from, and what it’s worth. Here are the multifaceted characteristics of money. Another, more advanced example of commodity money is a precious metal such as gold. For centuries, gold was used to back paper currency—up until the 1970s.2 In the case of the U.S. dollar, for example, this meant that foreign governments were able to take their dollars and exchange them at a specified rate for gold with the U.S. Federal Reserve. What’s interesting is that, unlike the beaver pelts and dried corn (which can be used for clothing and food, respectively), gold is precious purely because people want it. It is not necessarily useful—you can’t eat gold, and it won’t keep you warm at night, but the majority of people think it is beautiful, and they know others think it is beautiful. So, gold is something that has worth. Gold, therefore, serves as a physical token of wealth based on people’s perceptions.
money png clipart Money is historically an emergent market phenomenon establishing a commodity money, but nearly all contemporary money systems are based on fiat money. Fiat money, like any check or note of debt, is without use value as a physical commodity.
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