Money is anything which people are willing to accept in exchange for goods and services. Barter involved exchanging or swapping goods or services which people already have for something else they need. For example a pig in exchange for a pair of shoes. This system was very complicated. Not only did you need to find someone who had what you needed, but he/she had to be willing to accept whatever you had to offer. To overcome this problem money was Introduced.
For example how many pairs of shoes for one pig? Legal tender is the name given to the notes and coins which shopkeepers are obliged by law to accept in payment for goods and services. Currency is legal tender but cheeses and cards are not. Money today comes in three forms: * Notes and Coins – known as currency (Euro). Cheeses – to write cheeses you need to have a current account In the bank. Cards – credit cards, charge cards and ATM card.
These are known as plastic money.
Ireland along with eleven other countries formed an Economic and Monetary Union MME) which created a single currency, the Euro, to be used as currency in all twelve countries. However each country has its own special symbol on the back of their coins, and the front of each coin Is identical in all the countries. The Euro zone The twelve countries that Joined the single currency are Austria, Belgium, Finland, France, Germany, Greece, Ireland. Italy, Luxembourg. Portugal and Spain. It Is expected that sometime in the future other members will join.
Advantages of a single urrency. The main advantages to Ireland of having a single European currency are: Firms that import or export goods between Euro zone countries can trade without exchange rate changes. The firms know how much goods cost and will receive In payment. No more commission for changing currencies. Ireland’s Interest rate should stay relatively low. Ireland’s inflation rates should stay relatively low. Questions at the end of the chapter answered. 1