Who Needs Money?

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• Part 2: Who Needs It?

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Part 1: What Is Money?

Money is everywhere. You can look just about anywhere and see an example of money.

What is it?

Many people would answer this question by saying, "Dollars and cents" or "francs" or "rupees" or "pennies and pounds." The truth is, money doesn't have to be paper money. It doesn't have to be coins.

Money can be anything you want it to be. Almost.

The real definition of money is this: anything that enough people will accept as payment for something. If you can convince enough people to accept Pokemon cards as money, then Pokemon cards are money.

Does this sound silly? It isn't really. What we're really talking about here is a strict definition of money. Nowadays, people think of money as paper and coins. But people use other things to pay other people. You might have a lot of something that other people want, like Pokemon cards. If your friends want those Pokemon cards that you have, then you can use those cards as money to pay for things that you get from your friends.

This is called barter. Barter is exchanging something other than money for something else. Here's another example: You have a bunch of Pokemon cards, and your friend has a bunch of baseball cards. You want to start a baseball card collection, and your friend wants to start a Pokemon card collection. Each of you has some duplicates, or more than one of a certain card. You give these duplicates to your friend and get his or her duplicates in return.

The two of you have just exchanged something, but it wasn't money. You could have paid money for what you got, but you didn't. You could have insisted that your friend pay money for what you gave him or her, but you didn't. You just traded. And whether you realized it or not, you were taking part in a barter. This is the way people used to pay each other, long before paper and coin money were invented.

Now, your family probably pays a lot of bills: rent (or house payment), electric bill, phone bill, maybe a car payment, credit card bills, etc. Can your family pay these bill using Pokemon cards or baseball cards? Probably not. Most of the companies that send your family these bills want money (real money, like cash). If you're in America, they want dollars and cents.

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