money

Money is a commodity accepted by general consent as a medium of economic exchange. It is the medium in which prices and values are expressed. It circulates from person to person and country to country, facilitating trade, and it is the principal measure of wealth.

The first use of paper money occurred in China more than 1,000 years ago. By the late 18th and early 19th centuries, paper money and banknotes had spread to many other parts of the world.

The use of metal for money can be traced back to Babylon, prior to 2000 BCE. Standardization and certification in the form of coinage did not occur except perhaps in isolated instances until the 7th century BCE. Historians generally ascribe the first use of coined money to Croesus, king of Lydia, a state in Anatolia.

The U.S. dollar is the most widely used currency in international trade, even in trade between countries other than the United States. It is the unit in which countries often express their exchange rate. Countries maintain their “official” exchange rates by buying and selling U.S. dollars and hold dollars as their primary reserve currency.