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KHASANOVA KAMOLA
SALOKHIDDIN QIZI
Student of “STARS” International
University Business administrations
salokhiddinovna@bk.ru
YOQUBOVA NIGORA
NIZOMIDDINOVNA
STARS International University
in Tashkent Senior Teacher
eshmurodovanigora707@gmail.com
THE
ECONOMY
Abstract:
The economy is the one and only system by which money, industry, and trade
are organized, nevertheless, the economy is the part of our life. When someone asks from
us to image what is the economy, we simply think about money or how money works, but
when they ask about money, we think about notes, coins, bills, or credit cards. So when
and why money was created? What is the economy, is it money or the system? Why do
we need аn economy? Although, we know the answer for these questions, we always mis-
understand the actual meaning of these statements.
Keywords:
Economy, money, ES – Economy System, Coins, trade exchange, World War
I, banknotes, hyperinflation
When and why money was created?
Money was created 5000 years ago, but why? We still do not know how, why,
who created money but we all know that now money plays an important role in
the world’s economy. The main reason of money creation is the rock bottom of
trade exchange, which made people to create thing that will be more valuable
than the things that they own.
Let’s first define money in detail before delving deeper into where it originat-
ed. Coins like nickels, dimes, and quarters are likely to come to mind when you
think of money, along with of course, dollar notes. Money is anything that people
generally accept as payment for the exchange of goods and services, according
to economists. The usage of other items as money is common, even though each
nation has its own system of coins and paper money. Farmers may barter with one
another, exchanging a set quantity of animals for goods or services, for instance.
Then animals also would serve as currency.
People couldn’t occasionally agree on the value of the commodities being ex-
changed. In other circumstances, folks might just not be interested in trading for
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what you have. The emergence of commodity money was influenced by these
circumstances.
Almost everyone uses commodities, which are basic goods. In the past, salt, tea,
cattle, and seeds were common commodities. By using these forms of payment,
some of the issues with bartering were resolved. Nevertheless, using commodities
brought about new issues. The transportation and storage of commodities were
frequently problematic and they were frequently perishable.
People started making coins made of precious metals to use as money as a re-
sult of the problems with commodities. Although, no one can say for certain who
created this type of currency, historians believe metal objects were originally uti-
lized as currency as early as.
Now to have money is a priority for people and it is much more valuable than
all the world’s stuffs. In modern word we call money differently such as “Economy
system”, simple paper created not only trade exchange but the whole system by
which all the countries run.
What is the economy, is it money or system?
The economy is the system, which controls money circulation. The circulation
of money is part of the one and only way to survive in this world. Money – notes,
coins, and credit cards are the things that were created to have the perfect stan-
dards of trade exchange, which all of them are controlled by the ES. Have you ever
been interested in the shop about where your money will go after you paid it, let’s
imagine you gave $99.99 for brand new shoes, money that you paid will be used
as change or will be given to the renter or maybe paid as tax, no matter what, that
money is not going to stay forever in that shop that you bought your shoes? The
point of the circulation of money is the understanding that money was created to
be used to be saved as an exhibit at the museum, and the system that controls
it – is the Economy System. However, what money does do? Money generates
that Economy System. There would not even be the epithet of “Economy” if there
would not money. Thus, the money and Economy are tightly interconnected, as
well as, money circulation and ES.
Why do we need an Economy?
As it mentioned before the economy is the system that controls money circula-
tion, which is necessary to keep order in the world. As people are born, they will
always need something to eat and drink, and, place to stay and live, which is the
stuffs that cost money, and the system that controls it – is the Economy.
We go to school to get General Certificate of Secondary Education, which
will help us to apply for University (Higher education), we study at the Uni-
versity to get a job, and we get the job to earn money. Today money is being
created by central banks, companies buy that money from the banks, people
(workers) get that money as a salary, and the banks collect them back as tax &
loans, but when that circulation is not working smoothly, banks create money
again to make circulation work better. However, banks are not always able to
create money, because, if everyone will have a lot of money, the money will
Global dunyoda ilm-fan va ta‘limdagi innovatsion
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lose its worth and the economy will collapse, which means there will be chaos
in the world.
Let’s take an example where hyperinflation happened (Hyperinflation is the
proses when the cost of products and services increases by more than 50% ev-
ery month). Germany was a wealthy nation before World War I, with a booming
economy, a currency backed by gold, and a position of global leadership in man-
ufacturing, chemicals, and optics. All of the currencies–the German Mark, British
shilling, French franc, and Italian lira–had almost the same value and could be
exchanged for four or five dollars. A wheelbarrow full of cash in 1923, during the
height of the German hyperinflation, could not even buy a newspaper due to the
one trillion Mark to one $ exchange rate between the two currencies. The value
of the currency was gone. The hyperinflation made it difficult for average Ger-
mans to survive, the majority of whom were members of the working classes who
worked in industries. Even necessities like bread, meat, and coal for house heat-
ing became difficult to come by as a result of the exponential price increase. Pay
received one day was frequently useless the following. There are several stories
of Germans hurrying to the bakery or the store during their lunch breaks because
they knew that if they waited until closing time, their money would have declined
so badly that they would no longer be able to purchase the necessary supplies.
Formerly highly precious banknotes were reduced to being worth barely a frac-
tion of a Pfennig (penny), to the point where some people started using them as
toilet paper or even as wallpaper.
So, here we have to realize the importance of the Economy, as not understand-
ing it – is able to destroy the countries money circulation at all. It is really neces-
sary to have a strong Economy System, as a strong economy means – a strong
currency. The present day, ES of many countries is getting worse as most of peo-
ple are not able to return the loans that they took out of the bank. In the past one
member of the family (mostly men) was working and it was enough to feed 9 – a
membered family, but year by year the economy was growing and the second
member of the family started to work, but the modern economy made people live
beyond their means, and now even if all the members of a family will work it’s diffi-
cult to earn enough to survive, therefore people are borrowing more than they are
earning. This issue is making the ES of countries face to Economic growth even
more. So, the importance of the Economy in our life is to clarify the ES to survive
in this world.
Reference:
1. The Core Team (2021). The Economy: Economics for a Changing World 1
st
.
Core Economics Education.
2. Michelle, L. (2022). The 7 Best Economics Books of 2022. Investopedia.
Kate, R. (2019). Doughnut Economics. Wob Press.
