Used by permission. Office of the Superintendent of Public Instruction, State of Washington. The world of foreign currency often seems confusing. Piasters, lira, pence, rubles, yen and krona are terms difficult enough to comprehend on their own without adding the task of trying to figure out what each is worth in terms of United States dollars. All of these currencies are money, so all serve the same functions.
Money is a medium of exchange, a store of value and a measure of value.
As a medium of exchange, money is accepted as a means for purchasing goods and services. Both the consumer and producer agree to the form of money. As a store of value, money can be saved for future use, a characteristic that many items used as barter goods did not have. Where crops would spoil or animals die, money lasts for a long period of time. As a measure of value money allows us to compare the worth of one object with the worth of another.