Task 4. Read, translate the following text and retell it.

Date: 2015-10-07; view: 568.

Money

Money is any marketable good or token used by a society as a medium of exchange, store of value and unit of account. Many goods or tokens have some of the characteristics outlined above. However no good or token is money unless it can satisfy all three criteria.

Since the needs arise naturally, societies create one or several money objects when none exists. In other cases, a central authority creates a single money object and compels its use; this is more frequently the case in modern societies with paper money.

The value of money emerges in no small part from its utility as a medium of exchange, however its utility as a medium of exchange depends on it having recognized market value. Hence these two aspects of money are interdependent.

Commodity money was the first form of money to emerge. Under a commodity money system, the object used as money has inherent value. It is usually adopted to simplify transactions in a barter economy; thus it functions first as a medium of exchange. It quickly begins functioning as a store of value, since holders of perishable goods can easily convert them into durable money. In modern economies, commodity money has also been used as a unit of account. Gold-backed currency notes are a common form of commodity money.

Fiat money is a relatively modern invention. A central authority (government) creates a new money object that has minimal inherent value. The widespread acceptance of fiat money is most frequently enhanced by the central authority mandating the money's acceptance under penalty of law and demanding this money in payment of taxes or tribute. At various times in history government issued promissory notes have later become fiat currencies (US dollar) and fiat currencies have gone on to become a form of commodity currency (Swiss Dinar).

When using money anonymously, the most common methods are gold, cash (either coin or banknotes) and stored-value cards.