Money is any medium of exchange, a store of value, or a unit of account that embodies the properties of fungibility, durability, portability and recognizability that enable people to trust it for exchanges of goods and services. It replaces the barter system as a means of facilitating efficient trade. Its role as a medium of exchange is crucial to the growth and development of economies.
Currency is the tangible form of money, including paper bills and coins that are issued by national governments. It may also refer to branded currencies like airline and credit card points that are used for specific purposes only, but still carry value and function as a medium of exchange.
Modern money, in the form of printed paper and coins, has no intrinsic value of its own, but gets its value from the confidence that people place in it as a medium of exchange. It can be traded internationally on the foreign exchange market, influenced by various factors, such as economic stability, inflation, interest rates and geopolitics.
The value of a currency can be compared to other currencies through the use of an exchange rate, which determines how many units of one currency are needed to purchase another. A currency’s exchange rate is determined by supply and demand on the foreign exchange market, which operates 24 hours a day. The global economy is highly interconnected, and understanding the different currencies of nations is important for travel abroad and international investment decisions.
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