ABSTRACT
Money is brought into circulation by financial institutions. They create money in various shapes: coins, banknotes and demand deposits. The degree of confidence in the monetary system depends on the financial position of the monetary institutions. Money and inflation are interrelated. A rapid increase in money supply and a high inflation rate is a common situation in many countries. Using money as a means of evaluation becomes problematic with high inflation levels. In most countries, money comes in several forms: coins, banknotes and demand deposits. Money has developed from pieces of precious metal via standard coins to banknotes and demand deposits. Money is always a claim on a monetary financial institution. Monetary confidence depends ultimately therefore on confidence in monetary financial institutions. The one function of money is as a standard for expressing the value of goods and services.
