Post
Topic
Board Economics
Re: What is special for a currency
by
mcgravier
on 08/05/2013, 08:20:35 UTC
I have $10 worth of lunch, I eat it, it's gone

I have $10 in cash, I spend it to buy a lunch and eat it, it's gone too. But, that $10 note now becomes the income of the restaurant, they will spend it later, which will cause another $10 income for another guy, and so on...

In the first case, I ate a lunch, did not create any other economy activity

In the second case, I still ate a lunch, but I created a serial of economy activities

Why such a big difference just because the existing of currency? Is there something fundamentally different in the currency than general goods/services?

Well, how would you pay for meal if there would be no currency? In order to get $10, you need to earn it by producing something for someone the same way that other guy earned it by preparing meal for you.