Professional Documents
Culture Documents
Money Never Sleeps
Money Never Sleeps
Economic exchange happens between people: the sellers offer their goods and
services, and the buyers pay for them.
Each institution has its own budget, even a family.
States get their revenues from taxes, that’s why we need to pay them.
You will be able to analyze and explain the most popular proverbs and sayings
concerning money.
You will be able to present the history of money evolution.
You will be able to present the functions of money nowadays.
nagranie abstraktu
Thanks to money, the economic exchange has become easier, faster and more efficient.
Money facilitates trade. Some say it never sleeps, but constantly circulates in the economy.
Exercise 1
There are many proverbs and sayings about money. Do you know some of them? Read the ones
below and write down what you think they mean.
Pecunia una regimen est rerum omnium (La n: Only money is the ruler of the whole world;
Publilius Syrus).
Look a er the pennies and the pounds will look a er themselves (In for a penny, in for
a pound).
Throughout the history of mankind money took various forms. For many centuries, mainly
precious metals (gold, silver, bronze and copper) served the function of money. In the
middle of the third millennium BC in ancient Egypt metal bars began to be used as money, if
necessary cut into smaller pieces. Soon, money in a similar form appeared in China. The
oldest round metal coins are known from Sardes in Lydia (Asia Minor) and come from
around 650 BC. The ancient monetary systems were based on gold, silver and copper, and
the value of the coins was equal to the value of the metal they were made of.
Changes in the mutual price relations of these metals and so‐called spoiling of the money by
the rulers caused a gradual depreciation of money (the law of Copernicus‐Gresham).
Nicolaus Copernicus is the author of the law of “bad” money, according to which the inferior
money, i.e. made of inferior ore and of lesser value, displaces “better” money from
circulation. Copernicus described the law in the third version of his treatise “On the
Minting of Coin” (known as “Monetary Treatise”), in which he wrote: “When a new, worse
coin is introduced into circulation next to the old, better coin, it not only infects it, but
drives it out of circulation”. Decades later, similar views were presented by English financier,
Thomas Gresham.
Money depreciation means lowering the purchasing power (value) of money. In the
domestic market, it manifests itself in a decrease in the amount of goods and services that
can be purchased for a certain amount of money. As a rule, it results in inflation. The reverse
phenomenon – the increase in the value of money – is called appreciation. If the value
reduction takes place as a result of official decisions, it is called devaluation.
History of money
History of money
16th–18th century
In the sixteenth century, the inflow of silver to Europe from America caused its depreciation
against gold. The Polish zloty appeared as a settlement unit (equivalent to 30 groshes) in the
mid-fifteenth century, and as a real coin - in 1564. The creation of public banks at the dawn
of modern times brought about the development of clearing money. In the 17th century, the
first issuing banks were established (Sveriges Riksbank in 1668, Bank of England in 1694) and
paper money appeared in Europe. Earlier, as early as in the ninth century, paper money was
known in China. The oldest preserved paper money is Chinese 14th century kwan. The first
Polish issue of paper money was made in 1794.
19th century
In the nineteenth century, the term "metallic money" had a slightly different meaning than
in previous centuries. There were already banknotes and coins in circulation (called
“currency”), and the bullion was deposited in banks. On request, bills were exchanged for
gold or silver. However, since not all banknote holders reported for the precious metals at
the same time, the cash flow could have been larger than the bullion resources held. The
second half of the nineteenth century brought about the development of banking, the
emergence of supranational banking and the export of capital.
As history has shown, gold played the most important role as money. The United Kingdom
was the first to apply a money system based on gold. The main principles of the gold
standard system (the so‐called Gold Standard):
The domestic currency had a strictly defined gold parity, i.e. it was known how much
gold it contained.
Paper money was exchanged for gold at any request and without any restrictions.
Gold could be freely transferred on an international scale (with the help of the so‐called
automatic stabilizers of the gold currency, the balance of payment of individual
countries was maintained).
The economic system based on the golden currency was destroyed by the first world war.
During the Great Depression of the 1930s, all countries (except the United States, which
suspended convertibility only on August 15, 1971) decided to move away from convertibility
into gold. Convertibility to other currencies was also limited in scope. The global monetary
system has broken into several currency blocks. These negative phenomena deepened after
the second world war.
To avoid effects similar to those of the first world war, in July 1944, a conference was held in
Bretton Woods in the United States to determine the principles of the post‐war monetary
system. A so‐called the Bretton Woods system based on the US dollar and gold (the so‐called
Dollar Standard) was established. The Bretton Woods system assumed the restoration of
mutual convertibility of currencies according to fixed exchange rates. The International
Monetary Fund (IMF) was to watch over this. The same year another important institution
was created – the International Bank for Reconstruction and Development (IBRD) called the
World Bank . At the beginning of the 1970s, the Bretton Woods system destabilized, which
resulted in the transition of the IMF to a system of liquid exchange rates. In 1976, a decision
was made to refrain from specifying currency parities in gold (the so‐called
demonetarization of gold). The weakening position of the US dollar prompted the IMF to
create its own settlement money - the special drawing rights.
In 1978, Western European countries created a separate settlement unit – ECU, valid until
January 1, 1999, when the euro was created. The ECU was replaced by the euro in a ratio of 1
ECU = 1 EUR.
Money plays a fundamental role in a market economy. In fulfilling its functions, the most
important of which is the function of being a method of payment, it can not exist without
universal trust in it as a functional instrument of practical action. The basis of this
widespread trust is its unchanging functional usefulness. Thanks to its properties, fiduciary
money (from fidus - trust), that is, money without support in material goods (e.g. gold)
functioning as a universal, mediating liquid asset, provides broadly understood economic
freedom. Money is the only measure for the precise expression of the prices of economic
goods.
stable,
accepted in the global dimension,
giving the opportunity to make attractive investments,
the state (official) currency - there is no gold, therefore the state is the guarantor.
Economic changes in the modern world cause evolution of the form of money. Money does
not have to have a material form today (banknotes or coins). There is also non‐cash money
(called bank or scriptural money, because it is the object of bank records). The possibility of
using electronic (virtual) money seems to be the basis for transactions in the economy of the
near future.
a value meter – it is possible to express the value of other goods and services using
money (you can compare the prices of goods),
means of circulation (trade exchange),
means of payment (means of regulating liabilities),
means of thesaurisation (accumulation) - in order to fulfill this function, it must have
stable purchasing power,
global money – if it performs the above functions on the international market.
the supply must be limited (i.e. it should be secured by goods and services – the term
“substantial money” is used);
it must be divisible into smaller units without loss of value,
it must be easily portable,
durable – for example, banknotes of a lower denomination remain in circulation for
approximately 9 months, of higher denominations - even up to 11 years,
difficult to forge.
In Poland, the monetary unit is the Polish zloty (symbol: PLN), since the denomination on
January 1, 1995, we add „new”. This reform, defined as the „reform of the deletion of four
zeros”, replaced 10,000 PLZ by 1 PLN.
Money is a basic element of the modern economy. Thanks to money, transactions can be
more efficient and easy. It seems that money does not bring happiness, but it can certainly
be said that the lack of money causes many complications and problems that make it difficult
for us to achieve our life goals. Money must be treated as a means, a tool, and not as a value
in itself. According to Robert Kyosaki, the author of many books on investing: „Money is not
a goal. Money has no value. The value is in the dreams that money will help come true”.
Exercise 2
Listen to the abstract recording to review the material and new vocabulary. Then do the
vocabulary exercise. Match the pairs: English and Polish words.
efficient
commonly
pa ern
issue
availability
to contain
restric on
to interfere
Keywords
money, barter exchange, spoiling of the money, purchasing power, Gold Standard, Bretton
Woods system, International Monetary Fund, International Bank for Reconstruction and
Development, ECU, European Monetary System, Special Drawing Rights, fixed (pegged)
exchange rate, currency, eurozone, denomination
Glossary
household
efficient
wydajny, efektywny
constantly
stale, ciągle
to circulate
krążyć
proverb
przysłowie
to s nk
śmierdzieć
to look a er
dbać
direct
bezpośredni
economic turnover
obrót gospodarczy
commonly
powszechnie
throughout
przez poprzez
mankind
Nagranie dostępne na portalu epodreczniki.pl
ludzkość
precious (metals)
copper
miedź
bar
sztabka
ancient
starożytny
gradual
stopniowy
deprecia on
utrata wartości
inferior
to displace
lesser
mniejsza
trea se
to infect
decade
dekada, dziesięciolecie
purchasing power
siła nabywcza
to mint
wybijać (monetę)
pa ern
wzór
at the dawn of
na początku
to preserve
zachowywać
issue
wydanie
availability
dostępność
amber
bursztyn
grain
Nagranie dostępne na portalu epodreczniki.pl
zboże
ingenuity
pomysłowość
ore
ruda, kruszec
legal tender
se ler
osadnik
beaver
bóbr
to capture
schwytać, pozyskać
to cease
zaprzestać
cradle
kolebka
ca le
bydło
bullion
to deposit
składać, powierzać
emergence
pojawienie się
parity
przelicznik
to contain
zawierać
restric on
ograniczenie
conver bility
wymienialność
limited in scope
o ograniczonym zakresie
to determine
ustalać
restora on
przywrócenie
mutual
wzajemny
to refrain
Nagranie dostępne na portalu epodreczniki.pl
wstrzymywać się
basket
koszyk
several
kilka
devia on
odchylenie
to intervene
interweniować
receivables
należności
liabili es
zobowiązania
tangible
namacalny
to interfere
withdrawal
wycofanie
widespread
medita ng
pośredniczący
portable
przenośny
durable
trwały
to forge
podrabiać
to come true
urzeczywistniać
Lesson plan (Polish)
Adresat:
Podstawa programowa:
Cele operacyjne:
Uczeń:
Metody nauczania:
dyskusja,
burza mózgów,
oś czasu,
rozmowa nauczająca z wykorzystaniem planszy interaktywnej, schematu
interaktywnego, ćwiczeń interaktywnych.
Formy pracy:
indywidualna,
grupowa,
zbiorowa.
Środki dydaktyczne:
Przebieg zajęć:
Faza wstępna:
Faza realizacyjna:
1. Nauczyciel prosi uczniów, aby odliczyli do czterech i zapamiętali swoją cyfrę. Następnie
prosi ich, aby zapoznali się z informacjami zawartymi w schemacie interaktywnym „What
can be used instead of money?”. Każdy uczeń studiuje informacje zawarte pod przypisaną
mu cyfrą, następnie uczniowie łączą się w czteroosobowe grupy (siedzące obok siebie
„cyfry” 1–4) i każdy z uczniów wyjaśnia pozostałym, co, kiedy, dlaczego i przez kogo było
używane zamiast pieniędzy w jego fragmencie schematu lub przedstawia inne informacje
w nim zawarte. Nauczyciel monitoruje proces pracy grup, upewniając się, że uczniowie nie
tylko czytają infografikę, ale rzeczywiście wymieniają się informacjami między sobą.
2. Nauczyciel inicjuje burzę mózgów dotyczącą tego, co obecnie mogłoby być używane
w miejsce pieniędzy. Wyznacza moderatora i czas realizacji zadania. W pierwszej części
ćwiczenia moderator zapisuje na tablicy wszystkie propozycje swoich koleżanek i kolegów.
Na tym etapie nie są one poddawane krytyce. Po upływie czasu wyznaczonego na tę część
zadania uczniowie wspólnie poddają analizie swoje pomysły, podają argumenty
przemawiające za i przeciw stosowaniu danego środka wymiany. W rezultacie tego procesu
wybierają trzy najlepsze pomysły. Po zakończeniu dyskusji nauczyciel zachęca uczniów do jej
podsumowania, pytając:
3. Nauczyciel dzieli klasę na cztery grupy. Zadanie dla każdej grupy jest takie samo:
przygotować oś czasu rozwoju pieniądza przy wykorzystaniu informacji zawartych
w abstrakcie i innych źródłach oraz darmowej aplikacji online do tworzenia osi czasu (np.
Sutori). Nauczyciel wyjaśnia uczniom, że skoro będą pracować nad tym samym zadaniem,
ważne jest, aby nie skupiali się tylko na treściach w podręczniku, ale znaleźli w internecie
różnorodne informacje ilustrujące poszczególne etapy historii rozwoju pieniądza (artykuły,
zdjęcia, nawet krótkie filmy). Aplikacja pozwala na jednoczesną pracę wielu użytkowników,
a na stronie głównej zawiera obszerną instrukcję wykorzystania jej wszystkich możliwości.
Nauczyciel wyznacza czas na realizację zadania, prosi uczniów, aby podzielili się pracą
w grupach i wyznaczyli osobę, która zaprezentuje oś czasu pozostałym uczniom w klasie.
Faza podsumowująca:
Dwa ostatnie zdania oceniają trudność omawianego zagadnienia; dzięki nim uczeń dokonuje
samooceny swoich wiadomości i umiejętności.
b. Odsłuchaj nagranie abstraktu, aby powtórzyć materiał i utrwalić nowe słówka. Następnie
wykonaj ćwiczenie słownikowe na końcu rozdziału.
Pojęcia
household
efficient
wydajny, efektywny
constantly
stale, ciągle
to circulate
krążyć
proverb
przysłowie
to s nk
śmierdzieć
to look a er
dbać
direct
bezpośredni
economic turnover
obrót gospodarczy
commonly
powszechnie
throughout
przez poprzez
mankind
Nagranie dostępne na portalu epodreczniki.pl
ludzkość
precious (metals)
copper
miedź
bar
sztabka
ancient
starożytny
gradual
stopniowy
deprecia on
utrata wartości
inferior
to displace
lesser
mniejsza
trea se
to infect
decade
dekada, dziesięciolecie
purchasing power
siła nabywcza
to mint
wybijać (monetę)
pa ern
wzór
at the dawn of
na początku
to preserve
zachowywać
issue
wydanie
availability
dostępność
amber
bursztyn
grain
Nagranie dostępne na portalu epodreczniki.pl
zboże
ingenuity
pomysłowość
ore
ruda, kruszec
legal tender
se ler
osadnik
beaver
bóbr
to capture
schwytać, pozyskać
to cease
zaprzestać
cradle
kolebka
ca le
bydło
bullion
to deposit
składać, powierzać
emergence
pojawienie się
parity
przelicznik
to contain
zawierać
restric on
ograniczenie
conver bility
wymienialność
limited in scope
o ograniczonym zakresie
to determine
ustalać
restora on
przywrócenie
mutual
wzajemny
to refrain
Nagranie dostępne na portalu epodreczniki.pl
wstrzymywać się
basket
koszyk
several
kilka
devia on
odchylenie
to intervene
interweniować
receivables
należności
liabili es
zobowiązania
tangible
namacalny
to interfere
withdrawal
wycofanie
widespread
medita ng
pośredniczący
portable
przenośny
durable
trwały
to forge
podrabiać
to come true
urzeczywistniać
Teksty i nagrania
nagranie abstraktu
Thanks to money, the economic exchange has become easier, faster and more efficient.
Money facilitates trade. Some say it never sleeps, but constantly circulates in the economy.
Today it is hard to imagine an economy without money. However, this was not always the
case. Even now you can find examples of barter exchange, which is a direct exchange of
goods against goods (or services) without the use of money. What is money? Money is an
agent in the economic turnover. It is a good commonly accepted as a form of payment for
other goods and services.
Throughout the history of mankind money took various forms. For many centuries, mainly
precious metals (gold, silver, bronze and copper) served the function of money. In the
middle of the third millennium BC in ancient Egypt metal bars began to be used as money, if
necessary cut into smaller pieces. Soon, money in a similar form appeared in China. The
oldest round metal coins are known from Sardes in Lydia (Asia Minor) and come from
around 650 BC. The ancient monetary systems were based on gold, silver and copper, and
the value of the coins was equal to the value of the metal they were made of.
Changes in the mutual price relations of these metals and so‐called spoiling of the money by
the rulers caused a gradual depreciation of money (the law of Copernicus‐Gresham).
Nicolaus Copernicus is the author of the law of “bad” money, according to which the inferior
money, i.e. made of inferior ore and of lesser value, displaces “better” money from
circulation. Copernicus described the law in the third version of his treatise “On the
Minting of Coin” (known as “Monetary Treatise”), in which he wrote: “When a new, worse
coin is introduced into circulation next to the old, better coin, it not only infects it, but
drives it out of circulation”. Decades later, similar views were presented by English financier,
Thomas Gresham.
Money depreciation means lowering the purchasing power (value) of money. In the
domestic market, it manifests itself in a decrease in the amount of goods and services that
can be purchased for a certain amount of money. As a rule, it results in inflation. The reverse
phenomenon – the increase in the value of money – is called appreciation. If the value
reduction takes place as a result of official decisions, it is called devaluation.
History of money
Not only gold
As history has shown, gold played the most important role as money. The United Kingdom
was the first to apply a money system based on gold. The main principles of the gold
standard system (the so‐called Gold Standard):
The domestic currency had a strictly defined gold parity, i.e. it was known how much
gold it contained.
Paper money was exchanged for gold at any request and without any restrictions.
Gold could be freely transferred on an international scale (with the help of the so‐called
automatic stabilizers of the gold currency, the balance of payment of individual
countries was maintained).
The economic system based on the golden currency was destroyed by the first world war.
During the Great Depression of the 1930s, all countries (except the United States, which
suspended convertibility only on August 15, 1971) decided to move away from convertibility
into gold. Convertibility to other currencies was also limited in scope. The global monetary
system has broken into several currency blocks. These negative phenomena deepened after
the second world war.
To avoid effects similar to those of the first world war, in July 1944, a conference was held in
Bretton Woods in the United States to determine the principles of the post‐war monetary
system. A so‐called the Bretton Woods system based on the US dollar and gold (the so‐called
Dollar Standard) was established. The Bretton Woods system assumed the restoration of
mutual convertibility of currencies according to fixed exchange rates. The International
Monetary Fund (IMF) was to watch over this. The same year another important institution
was created – the International Bank for Reconstruction and Development (IBRD) called the
World Bank . At the beginning of the 1970s, the Bretton Woods system destabilized, which
resulted in the transition of the IMF to a system of liquid exchange rates. In 1976, a decision
was made to refrain from specifying currency parities in gold (the so‐called
demonetarization of gold). The weakening position of the US dollar prompted the IMF to
create its own settlement money - the special drawing rights.
In 1978, Western European countries created a separate settlement unit – ECU, valid until
January 1, 1999, when the euro was created. The ECU was replaced by the euro in a ratio of 1
ECU = 1 EUR.
Money plays a fundamental role in a market economy. In fulfilling its functions, the most
important of which is the function of being a method of payment, it can not exist without
universal trust in it as a functional instrument of practical action. The basis of this
widespread trust is its unchanging functional usefulness. Thanks to its properties, fiduciary
money (from fidus - trust), that is, money without support in material goods (e.g. gold)
functioning as a universal, mediating liquid asset, provides broadly understood economic
freedom. Money is the only measure for the precise expression of the prices of economic
goods.
stable,
accepted in the global dimension,
giving the opportunity to make attractive investments,
the state (official) currency - there is no gold, therefore the state is the guarantor.
Economic changes in the modern world cause evolution of the form of money. Money does
not have to have a material form today (banknotes or coins). There is also non‐cash money
(called bank or scriptural money, because it is the object of bank records). The possibility of
using electronic (virtual) money seems to be the basis for transactions in the economy of the
near future.
a value meter – it is possible to express the value of other goods and services using
money (you can compare the prices of goods),
means of circulation (trade exchange),
means of payment (means of regulating liabilities),
means of thesaurisation (accumulation) - in order to fulfill this function, it must have
stable purchasing power,
global money – if it performs the above functions on the international market.
the supply must be limited (i.e. it should be secured by goods and services – the term
“substantial money” is used);
it must be divisible into smaller units without loss of value,
it must be easily portable,
durable – for example, banknotes of a lower denomination remain in circulation for
approximately 9 months, of higher denominations - even up to 11 years,
difficult to forge.
In Poland, the monetary unit is the Polish zloty (symbol: PLN), since the denomination on
January 1, 1995, we add „new”. This reform, defined as the „reform of the deletion of four
zeros”, replaced 10,000 PLZ by 1 PLN.
Money is a basic element of the modern economy. Thanks to money, transactions can be
more efficient and easy. It seems that money does not bring happiness, but it can certainly
be said that the lack of money causes many complications and problems that make it difficult
for us to achieve our life goals. Money must be treated as a means, a tool, and not as a value
in itself. According to Robert Kyosaki, the author of many books on investing: „Money is not
a goal. Money has no value. The value is in the dreams that money will help come true”.
Lesson plan (English)
Addressee:
Core curriculum:
Learning outcomes:
The student:
analyses and explains the most popular proverbs and sayings related to money.
presents the history of money development.
presents the contemporary functions of money.
Key competences:
Teaching methods:
discussion,
brainstorming,
timeline,
teaching conversation using interactive board, interactive scheme, interactive
exercises.
Forms of work:
self‐learning,
group work,
whole‐class activity.
Introduction:
1. The teacher presents the goal of the lesson: You will analyse the history of money and its
contemporary meaning.
2. The teacher informs the students that together they will explain well‐known sayings
related to money. To this end, they will solve Exercise 1.
Implementation:
1. The teacher asks the students to count to four and remember their number. Afterwards,
they are asked to read the information contained in the „What can be used instead of
money?” interactive scheme. Each student studies the information contained under the
assigned number, then the students merge form groups of four (students who seat next to
each other with the numbers 1–4) and each student explains to the others what, when, why
and by whom was used instead of money in his or her diagram, or presents other
information contained in the diagram. The teacher monitors the process of the groups'
work and makes sure that the students not only read the infographic but actually exchange
information among themselves.
2. The teacher initiates brainstorming about what could nowadays be used instead of money.
The teacher appoints a moderator and sets a time limit for this task. In the first part of the
exercise, the moderator writes down on the board all the suggestions of his or her
colleagues. The suggestions are not subject to criticism at this stage. When the time is up,
the students jointly analyse their ideas and argue for and against using a given exchange
medium. As a result of this discussion, they choose three best ideas. After the discussion,
the teacher encourages the students to summarize it by asking:
3. The teacher divides the class into four groups. The task for each group is the same:
prepare a time axis of money development using information contained in the abstract and
other sources as well as using a free online application for creating a time axis (e.g. Sutori).
The teacher explains to the students that since they will work on the same task, it is
important that they do not focus only on the textbook, but also search the internet for
various information illustrating different stages of the history of money (articles, photos,
even short films). The application allows multiple users at the same time and its homepage
contains a comprehensive instruction on how to take advantage of all the possibilities it
offers. The teacher sets a time limit for this task and asks the students to work in groups and
designate a spokesperson who will present the time axis to the rest of the class.
4. When the time is up, the spokespersons present the results of their group's work and the
other students comment on the results, saying what they liked about the presentation and
what they thought could have been done or explained differently. Afterwards, also the
teacher briefly comments on time axes presented by the students and evaluates them.
Summary:
1. At the end of the class the teacher asks the students to finish the sentences:
Today I learned…
I understand now that…
I was surprised…
I found out…
It was easy for me…
It was difficult for me...
The last two sentences help evaluate the difficulty of the discussed question; they enable
the student to evaluate his own knowledge and skills.
2. Homework proposal:
a. Familiarize yourself with the definitions contained in the „Definitions connected with
money” interactive scheme. Explain in your own words what your understanding of the
terms that are contained in the scheme is.
b. Listen to the abstract recording to review the material and new vocabulary. Then do the
vocabulary exercise at the end of the chapter.
Terms
household
efficient
wydajny, efektywny
constantly
stale, ciągle
to circulate
krążyć
proverb
przysłowie
to s nk
to look a er
dbać
direct
bezpośredni
economic turnover
obrót gospodarczy
commonly
powszechnie
throughout
przez poprzez
mankind
ludzkość
precious (metals)
copper
miedź
bar
sztabka
ancient
starożytny
gradual
Nagranie dostępne na portalu epodreczniki.pl
stopniowy
deprecia on
utrata wartości
inferior
to displace
lesser
mniejsza
trea se
traktat (naukowy)
to infect
decade
dekada, dziesięciolecie
purchasing power
siła nabywcza
to mint
wybijać (monetę)
pa ern
at the dawn of
na początku
to preserve
zachowywać
issue
wydanie
availability
dostępność
amber
bursztyn
grain
zboże
ingenuity
pomysłowość
ore
ruda, kruszec
legal tender
se ler
osadnik
beaver
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bóbr
to capture
schwytać, pozyskać
to cease
zaprzestać
cradle
kolebka
ca le
bydło
bullion
kruszec
to deposit
składać, powierzać
emergence
pojawienie się
parity
przelicznik
to contain
zawierać
restric on
conver bility
wymienialność
limited in scope
o ograniczonym zakresie
to determine
ustalać
restora on
przywrócenie
mutual
wzajemny
to refrain
wstrzymywać się
basket
koszyk
several
kilka
devia on
odchylenie
to intervene
interweniować
receivables
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należności
liabili es
zobowiązania
tangible
namacalny
to interfere
withdrawal
wycofanie
widespread
rozpowszechniony
medita ng
pośredniczący
portable
przenośny
durable
trwały
to forge
podrabiać
to come true
nagranie abstraktu
Thanks to money, the economic exchange has become easier, faster and more efficient.
Money facilitates trade. Some say it never sleeps, but constantly circulates in the economy.
Today it is hard to imagine an economy without money. However, this was not always the
case. Even now you can find examples of barter exchange, which is a direct exchange of
goods against goods (or services) without the use of money. What is money? Money is an
agent in the economic turnover. It is a good commonly accepted as a form of payment for
other goods and services.
Throughout the history of mankind money took various forms. For many centuries, mainly
precious metals (gold, silver, bronze and copper) served the function of money. In the
middle of the third millennium BC in ancient Egypt metal bars began to be used as money, if
necessary cut into smaller pieces. Soon, money in a similar form appeared in China. The
oldest round metal coins are known from Sardes in Lydia (Asia Minor) and come from
around 650 BC. The ancient monetary systems were based on gold, silver and copper, and
the value of the coins was equal to the value of the metal they were made of.
Changes in the mutual price relations of these metals and so‐called spoiling of the money by
the rulers caused a gradual depreciation of money (the law of Copernicus‐Gresham).
Nicolaus Copernicus is the author of the law of “bad” money, according to which the inferior
money, i.e. made of inferior ore and of lesser value, displaces “better” money from
circulation. Copernicus described the law in the third version of his treatise “On the
Minting of Coin” (known as “Monetary Treatise”), in which he wrote: “When a new, worse
coin is introduced into circulation next to the old, better coin, it not only infects it, but
drives it out of circulation”. Decades later, similar views were presented by English financier,
Thomas Gresham.
Money depreciation means lowering the purchasing power (value) of money. In the
domestic market, it manifests itself in a decrease in the amount of goods and services that
can be purchased for a certain amount of money. As a rule, it results in inflation. The reverse
phenomenon – the increase in the value of money – is called appreciation. If the value
reduction takes place as a result of official decisions, it is called devaluation.
History of money
As history has shown, gold played the most important role as money. The United Kingdom
was the first to apply a money system based on gold. The main principles of the gold
standard system (the so‐called Gold Standard):
The domestic currency had a strictly defined gold parity, i.e. it was known how much
gold it contained.
Paper money was exchanged for gold at any request and without any restrictions.
Gold could be freely transferred on an international scale (with the help of the so‐called
automatic stabilizers of the gold currency, the balance of payment of individual
countries was maintained).
The economic system based on the golden currency was destroyed by the first world war.
During the Great Depression of the 1930s, all countries (except the United States, which
suspended convertibility only on August 15, 1971) decided to move away from convertibility
into gold. Convertibility to other currencies was also limited in scope. The global monetary
system has broken into several currency blocks. These negative phenomena deepened after
the second world war.
To avoid effects similar to those of the first world war, in July 1944, a conference was held in
Bretton Woods in the United States to determine the principles of the post‐war monetary
system. A so‐called the Bretton Woods system based on the US dollar and gold (the so‐called
Dollar Standard) was established. The Bretton Woods system assumed the restoration of
mutual convertibility of currencies according to fixed exchange rates. The International
Monetary Fund (IMF) was to watch over this. The same year another important institution
was created – the International Bank for Reconstruction and Development (IBRD) called the
World Bank . At the beginning of the 1970s, the Bretton Woods system destabilized, which
resulted in the transition of the IMF to a system of liquid exchange rates. In 1976, a decision
was made to refrain from specifying currency parities in gold (the so‐called
demonetarization of gold). The weakening position of the US dollar prompted the IMF to
create its own settlement money - the special drawing rights.
In 1978, Western European countries created a separate settlement unit – ECU, valid until
January 1, 1999, when the euro was created. The ECU was replaced by the euro in a ratio of 1
ECU = 1 EUR.
Money plays a fundamental role in a market economy. In fulfilling its functions, the most
important of which is the function of being a method of payment, it can not exist without
universal trust in it as a functional instrument of practical action. The basis of this
widespread trust is its unchanging functional usefulness. Thanks to its properties, fiduciary
money (from fidus - trust), that is, money without support in material goods (e.g. gold)
functioning as a universal, mediating liquid asset, provides broadly understood economic
freedom. Money is the only measure for the precise expression of the prices of economic
goods.
stable,
accepted in the global dimension,
giving the opportunity to make attractive investments,
the state (official) currency - there is no gold, therefore the state is the guarantor.
Economic changes in the modern world cause evolution of the form of money. Money does
not have to have a material form today (banknotes or coins). There is also non‐cash money
(called bank or scriptural money, because it is the object of bank records). The possibility of
using electronic (virtual) money seems to be the basis for transactions in the economy of the
near future.
a value meter – it is possible to express the value of other goods and services using
money (you can compare the prices of goods),
means of circulation (trade exchange),
means of payment (means of regulating liabilities),
means of thesaurisation (accumulation) - in order to fulfill this function, it must have
stable purchasing power,
global money – if it performs the above functions on the international market.
the supply must be limited (i.e. it should be secured by goods and services – the term
“substantial money” is used);
it must be divisible into smaller units without loss of value,
it must be easily portable,
durable – for example, banknotes of a lower denomination remain in circulation for
approximately 9 months, of higher denominations - even up to 11 years,
difficult to forge.
In Poland, the monetary unit is the Polish zloty (symbol: PLN), since the denomination on
January 1, 1995, we add „new”. This reform, defined as the „reform of the deletion of four
zeros”, replaced 10,000 PLZ by 1 PLN.
Money is a basic element of the modern economy. Thanks to money, transactions can be
more efficient and easy. It seems that money does not bring happiness, but it can certainly
be said that the lack of money causes many complications and problems that make it difficult
for us to achieve our life goals. Money must be treated as a means, a tool, and not as a value
in itself. According to Robert Kyosaki, the author of many books on investing: „Money is not
a goal. Money has no value. The value is in the dreams that money will help come true”.