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What is money? You might think the answer is simple—coins and paper bills. But did you know that throughout history, items such as beads, drums, eggs, feathers, leather, pigs, rice, and yams were used as money? So why don't we use eggs or yams to buy a CD?
Let's take a look at what money really is. Money is anything that is commonly accepted by a group of people for the exchange of goods or services. The problem with the eggs and yams is that one can't be sure how much the items are worth. How many eggs would it take to buy a CD? Who knows? When coins and paper bills were developed, each coin or paper bill was given a certain value, and it became easier for people to compare the costs of their items.
The system of coins and paper dollars we use in the U.S. is less than 100 years old. Today, we can travel anywhere in the country and pay for whatever we need with the same form of money we use in our hometown. What if each time we visited a different state, we had to use a different form of money? What if New York had "apple coins" and California had "sunshine dollars"? What a mess that would be!
That was actually the case in Europe, where each country had a different form of money. So when you were in Great Britain, you paid for things with pounds, and when you were in France, you paid for things with francs. But recently, a group of countries in Europe decided to use one common form of currency, called the euro. Now, most places you go in Europe, you can use the euro to pay for your goods and services.
Another European nation, Poland, has been invited to join this group of countries in the next few years. Poland currently uses the zloty as its currency. When it joins the other European countries, it will have to get rid of all zlotys and exchange them for euros. How would you feel if you were asked to trade in all of your dollars and coins for a totally different form of money? Would it depend on how many CDs you could buy with the new money versus the old?
At least changing currency is a decision for government leaders to address. The next time you go to buy something at the store, just be thankful that you don't have to pay for it with a family of pigs!
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