Characteristic signs of money. Monetary system and its elements. Types of money. Concept, signs and functions of money

The idea of ​​the essence of money is based on three of its main properties: absolute liquidity, the ability to measure the value of goods and preservation of value.

Concept liquidity is the most important for clarifying the essence of money. The liquidity of any property or asset refers to their ease of sale. Oil and oil products, gold, grain and some other goods have high liquidity. From assets such as securities, government bonds and shares of successful companies (“blue chips”) are distinguished by high liquidity. High liquidity means the ability of an asset to be easily and quickly sold without any loss of value.

Money has absolute liquidity. This property gives them unconditional purchasing power, i.e. the ability to serve as a universal means of exchange and payment.

An important and another basic property of money is the ability to measure price(value) of goods, services, assets. With barter exchange, co-measuring the value of goods would become an insoluble problem. Money makes it possible to measure the value of any product entering the market, to give it a quantitative measure, thereby ensuring its comparison with any other.

No less important is the third property - the ability of money keep price(value) of goods. They seem to contain an abstract value, which at any moment can be exchanged for the cost of a specific product or service.

For a long time, precious metals - gold and silver - were used as money (first in the form of bars, and then in the form of coins). These metals express these properties better than anything else. By the second half of the 19th century. bimetallism was replaced by monometallism, i.e. complete dominance of gold as a monetary metal. Gold was a special commodity, which, due to its physical properties, was singled out to perform the functions of money and became an equivalent commodity through which all other goods were exchanged. The most important reason This was the fact that gold, being a commodity, has its own intrinsic value. When exchanging for gold, two equal values ​​were exchanged, two goods (one of them was gold money) of equal value. Thus, initially money had a commodity nature, it was a special commodity, an equivalent commodity. But in the 20th century. the commodity nature was lost by them. Modern credit money is not characterized by a commodity nature and is not a commodity.

During the transition from gold money and banknotes exchangeable for gold (they are usually called full-fledged money), to banknotes (banknotes) not exchangeable for gold, and even more so to non-cash money, money lost its original feature that made it similar to the commodity world - its own intrinsic value. Modern credit money has no intrinsic value, but has direct, immediate purchasing power (therefore we can talk about its value), since it is characterized by all the properties necessary for money, primarily absolute liquidity. Having lost its commodity nature, modern money clearly corresponds to its general historical essence - it is a means, an instrument for the exchange of goods, services and assets.

Money is a very interesting phenomenon in our society. For some people there are never enough of them, for others there is nowhere to put them. For some, they are a means of survival, and for others, they are a source of the most unimaginable entertainment, such as a dish of oysters encrusted with gold. Who invented them and when? What are the functions of money and its characteristics?

What is money?

Money is the universal equivalent of all benefits, goods and services. Or rather, the equivalent of their cost. The history of the origin of money in humanity goes back to ancient times.

If earlier precious metals acted as money, now, in modern conditions, banknotes express the obligations of the state or central state bank in the form of banknotes or coins. In itself, such money is worth nothing. It is the obligations of the state that give them value.

Functions of money

It is the purpose of money, its functions, that reveal the very essence of money. The standard classification identifies following functions money:

Measure of value. This is the ability of money to be the standard for all types of goods and services. The product may have different weight, texture, dimensions and other physical characteristics and properties. Money is a universal meter, a measure of value, thanks to which you can compare two types of value and make a fair exchange.

Means of circulation. Money has such properties as speed and ease of exchange for any goods and services. They, acting as an intermediary, allow the manufacturer to sell goods at one point in time, and buy raw materials a day or week later in a completely different place. Money removes restrictions on exchange in time and space.

Instrument of payment. With money you can establish a debt and pay it off. If a product was borrowed, and subsequently the prices for it changed greatly, the amount of the debt will remain unchanged - after all, it is expressed in monetary units.

A means of storage. With the help of money it is possible to transfer your purchasing power into the future. This happens when we save cash, but we don’t spend them right away. This function is performed when money is not involved in circulation.

World money. World money appeared with the development of a system of international loans and foreign trade relations. Such funds act as a universal means of payment or a universal materialization of the wealth of world society.

Characteristics of money

If the functions of money reflect their essence, then their characteristics allow us to more accurately define the legal concept. There are the following public legal characteristics of money:

1. only coins and banknotes recognized by the state are considered money;

2. the production of money takes place in strict accordance with state standards and directly specialized institutions - mints;

3. The state sets the denomination of money arbitrarily, but it is expressed in national monetary units;

4. money is accepted throughout the territory of the country that issued it at face value;

5. Illegal production of money and its release into circulation is counterfeiting and entails criminal and administrative liability.

The national currency of the Russian Federation is the ruble. The issue of money, control over its circulation and withdrawal are carried out exclusively by the Central Bank of the Russian Federation.

Mezentseva Vasilisa

Financial literacy is impossible without understanding the essence of money and its properties. This topic is interesting and at the same time mandatory for every person who wants to learn how to handle them and understand by what laws they live. We encounter them every day and yet know absolutely nothing about them. Money can be called the international language of the world market, in which people from all over the planet communicate. Understanding the functions of money is the first step to financial literacy. If you know the theory and understand the basics, you are armed with a tool that will help you learn how to manage them competently. Let's look at the history of the appearance of money, its functions and essence.

The essence of goods and money

Money is impossible without goods. Therefore, first of all, you need to get a simple answer to the question: what is a product? A product is any product that meets three basic requirements:

• Produced for sale
• Satisfies specific needs
• Has value

In this regard, the essence of money is that it serves as an element and integral part economic activity society, relations between participants production process. Money is also a commodity (only universal) and therefore has the same properties as indicated above. But at the same time they also have a number of unique properties. So what is money?

According to the Great Russian Encyclopedia:

Money- this is a specific product of maximum liquidity, which has several properties that are their essence. Maximum liquidity is characterized by the fact that you can easily exchange your money for goods, while the opposite is a rather problematic process for you. The closest synonyms for the term liquidity are marketability and ease of sale. In addition, money:

• It is a tool for exchanging goods and services
• This is a universal equivalent to the cost of other goods and services
• This is a kind of certificate of the social nature of the private labor of the commodity producer

Basic functions of money

With each new century, money acquires new specific functions, but some of them are universal, which we will consider.

• Measure of value. Money is capable of changing and measuring the value of a product, therefore it is a standard for them. The form of manifestation of the value of a product is price. Price is the cost of a product expressed in money. Since at the very beginning of its existence money had an independent value (the silver and gold it contained), then initially the value of goods was correlated with the value of money through the ratio of social labor spent on their production. Nowadays, with the availability of loans, electronic money and funds, a lot has changed.
• Sharing tool. This is the original function of money, it means that you can exchange your goods for money and then use it to purchase the goods you need. After thousands of years to this main function dozens of others were added, completely changing the economic picture of the world.
• Instrument of payment. This function arose in connection with the development of credit relations. In this case, there is no reciprocal movement of money and goods. If you took out goods on credit, you will need to repay the amount of debt expressed in money, and not in goods. This function is also embodied in wages or making payments to the budget.
• Medium of exchange. In this case, money acts as an intermediary in the circulation of goods. And this is where the liquidity indicator plays a key role. You can sell your goods today and buy raw materials whenever you want. A person can buy the goods he needs in one place and sell them in a completely different place - that is, money overcomes spatial and temporal restrictions.
• Store of value. Not all money can and should be put into circulation immediately. A person can accumulate enough long period time, and then make some expensive purchase or order a service. The downside is that inflation is possible, which means the value of money will decrease.
• World money. Trade and loan relations are established between the countries of the world, which led to the emergence of the so-called world money. They function as a universal means of payment. Currently, five currencies are considered such: the US dollar, the euro, the Japanese yen, the British pound and the Swiss franc. From October 1, 2016, the Chinese yuan will become such a currency. However, people have learned to convert electronic money into 17 currencies, which significantly simplifies the process of commodity-market relations between countries.

As was said, the functions of money are constantly changing and supplemented, but the above are already universal long time. In connection with the emergence of new electronic money, as well as cryptocurrency, new functions may soon be invented and along with them the essence of money itself will change.

The history of money

Before the advent of money, the economy was significantly different from the modern one and functioned on the basis of debt and gift.

The gift economy is a social system in which services and goods are given free of charge (“The Gift Economy” by David Cheal). Some principles and elements of gifting still exist today, for example in the form of information. According to these principles, there are torrent trackers, and with some exceptions, science. IN in this case reputation is acquired and social status, which in the information world sometimes mean even more than the amount of money that can be earned by selling this information. The desire to accumulate resources and information in modern world considered a sign of weakness and greed.

Then in different regions around the world, people began to use various things as money:

• In many countries these were animal furs and skins, livestock.
• On the islands of Oceania, shells and pearls served as money.
• In New Zealand, stones with holes in the middle were used as money. The cost of such a stone was determined based on the size, material, as well as its history. Some stones reached 3.6 meters in diameter.
• IN Kievan Rus, despite the currency unit hryvnia, honey, salt, livestock and animal furs were used.
• Later, people began to use ingots, bars and scraps of metal as money.

As a result, the role of money shifted to metals. The function of money was performed by bronze, copper, iron and silver. Over time, whole ingots of metal began to be used, which caused significant inconvenience because they had to be constantly weighed and the sample determined. Therefore, in order to avoid counterfeiting and overdressing, metal began to be marked with a public mark, which led to the creation of minted coins and mint.

Minted coins became popular around the 7th century BC. They were convenient to store, their weight was quite small, and it became more convenient to pay due to their exact cost.

The first paper money appeared in China in 910. And already in 1661 the first issues of banknotes appeared in Stockholm. Around the same time, banks began to issue their own certificates, which confirmed that the money was in the banker's custody. Over time, these certificates themselves became money and there was no need to go to the bank in order to receive a certain amount of money.

As we see, the very creation and development of monetary units was a revolution in market relations and was simply necessary. People could create their goods faster and buy raw materials for production. We also note the evolution of the physical weight of money - from three-meter stones to paper ones. In our time, electronic currency has appeared and now money has come to where it came from - from the minds of people.

Time value of money

During the existence of money, people have formed many concepts and theories about it. One of the concepts was proposed back in 1202 by a famous mathematician. He formulated Golden Rule business: " The amount received today is greater than the same amount received tomorrow.".

We know all this now. The value of today's money is higher than the value of the same amount received in the future and even tomorrow. This is why (though not only) banks require interest on their loans.

From all of the above, two extremely important consequences emerge that any person seeking to become more financially literate needs to understand:

1. It is always worth considering the time factor when conducting financial transactions.
2. Summing up monetary values ​​relating to different periods of time is incorrect.

In order to understand what the value of money is over time, you need to calculate the value of money. This is why discounting was invented.

Discounting is an assessment of the value of the future flow of payments based on the different values ​​of money received at different points in time (“Fundamentals of Stochastic Financial Mathematics”, Shiryaev A.N.). That is, simply put, discounting will help you find out what the difference is between your profit of 100 monetary units in a year and today. Please also note that it is not only about inflation, but also that if you receive 100 monetary units today, you can invest them and receive additional income, even taking into account the loss of value of the amount over time. Calculating discounted value is important, for example, who want to understand whether their profits will depreciate so much that it is easier to invest money in something more profitable and not so long-lasting. You become poorer if you receive the same salary for months or years and spend it on your daily needs.

What does the discount rate depend on? There are five main factors:

• Return on alternative investments
• Price credit funds
• Inflation
• The period within which you expect to receive future income
• The risk associated with this future income

For this reason, investments are in a good way save and increase equity. Investing money in a bank essentially only allows you to save your money. It is also possible to increase your capital by putting money in a bank, but this becomes possible only in the case of a long term and compound interest. However, remember that in this case there is a serious risk that the bank will fail and you will lose the entire amount. And in best case scenario You will only return part of it. Compound interest is a good way to earn income because interest also accrues on interest. There are known cases when relatives became millionaires only because their ancestor invested a small amount of money into the account, and a century later the agreement was discovered. Of course, the bank had to pay a huge amount, but it received publicity for its longevity and attitude towards customers.

We will not give complex discounting formulas here, but we will give a simple example. Let's say in one year you expect a profit of 121 monetary units at a discount rate of 10%. Then the value of your future 121 units will actually be 110 units -121/(1+0.1). If in two years, then 100 - 121/(1+0.1) 2. This is the time value of your money.

As we wrote above, the cost of money is also affected by inflation. Let's take a closer look at it.

Inflation

There are many different definitions of this term, so we tried to give the simplest, most accurate and understandable one.

Inflation- this is the depreciation of money, as a result of which prices for goods and services, if they remain at the same level, then become less affordable. Inflation should not be confused with rising prices, because in the second case, prices for certain groups of goods increase, but in the case of inflation, money depreciates and all goods become more expensive. When they say that the purchasing power of the population has decreased, they usually mean inflation. The depreciation of money and a general increase in prices are its main signs.

There are two exceptional cases in world history of sharp increases in prices and inflation. The uniqueness is that, in theory, the financial security of citizens should have increased:

• IN European countries after the discovery of America, a lot of gold and silver began to arrive from Peru and Mexico. This led to an increase in prices by 2.5-4 times.
• In the 1840s, the development of California gold mines began, as well as mines in Australia. Gold production has increased sixfold, but prices around the world have increased by 25-50%.

The reason is that a large increase in money in the economy causes prices to rise. How more money in the economy, the more the product depreciates. Accordingly, an increase in production could help contain inflation in these two cases, but in the first case, in the absence of industrialization and industry, this could not be done, while the second became less catastrophic precisely because of the increase in production.

A slight increase in inflation around the world is considered normal. Its level usually increases slightly at the end of the year, when the amount of goods consumed and, at the same time, the level of corporate spending increases.

What are the causes of inflation? There are six main reasons, but besides them there are dozens and even hundreds of others that economists are still arguing about.

1. Money issue. Government spending increases, resulting in a decision to print more money. Issue - release of new money.
2. Mass lending. In this case, finances are taken not even from savings, but from the issue of currency not backed by goods. That is, the second reason is often adjacent to the first.
3. Excessive taxation. Not only is less goods produced in this case, but the tax itself falls on the shoulders of the ordinary consumer.
4. Monopolization of markets and monopoly pricing. Large firms determine the price and their own production costs.
5. Decrease in national production. This means that the previous volume of money supply corresponds to fewer goods.
6. Trade union monopoly. In this case, employee salaries are increased regardless of economic reasons.

As we see, with proper government management, high inflation can be avoided. Now there is only one country in the world that periodically experiences an increase in the value of money. This is the so-called deflation and it is last years characteristic of Japan.

Types of inflation

There is an open and hidden nature of inflation. With the open, everything is simple - it is a rise in prices and a decrease in purchasing power. It is visible and you don’t need to be an economist to recognize it. Hidden inflation is much more complex and interesting. For example, in the USSR for some time there was an increase wages and reduction in food prices. However, the natural consequence of such suppressed inflation was a commodity shortage and huge queues.

There are also the following types of inflation:

• Demand inflation- in this case there are fewer goods than people need.
• Cost inflation- prices increase due to rising production costs in conditions of unused resources. Thus, raw materials and resources are held up in warehouses, which increases the price per unit of production.
• Projected inflation— it can be predicted because many economic actors often behave in the same way. As mentioned above, by the end of the year the level of consumption usually increases, companies increase production, and therefore it is at this time that the inflation rate rises.
• Unpredictable inflation— in this case, the rise in inflation comes as a surprise to the population and government due to the complexity of the economic system.
• Balanced inflation— the prices of all goods rise almost equally. If inflation is inevitable, then it is more suitable for the country's economy; the economy is not shocked by surprises.
• Unbalanced inflation- in this case, the prices of some goods rise more than others. This leads to many sad consequences.
• Adapted consumer expectations— information about future inflation is disseminated in society, this changes consumer psychology, the demand for goods increases, which leads to higher prices.

Government intervention to suppress inflation does not always help. When the state prohibits increasing prices for a specific product, this leads to a decrease in the production of this product with all the ensuing consequences - for example, to cheaper production costs and the emergence of counterfeits.

There are types of inflation depending on the growth rate:

• Creeping inflation characterized by price increases of less than 10% per year. Some Western economists consider this a completely normal process. For example, if such inflation is caused by an increase in the money supply, then eventually this money will be used and the rate of production will also increase. But of course this is in theory, in practice everything entirely depends on the adequacy of the country’s leaders. In this case, such inflation gets out of control and turns into two other types described below.
• Galloping inflation characterized by price increases from 10 to 50%. The economy is out of control and requires urgent, perhaps even unpopular, measures. State intervention is acceptable.
• Hyperinflation characterized by price increases of 60% or more, which can reach astronomical numbers. We all know the example of Zimbabwe and the fact that they have a banknote of one hundred trillion Zimbabwean dollars. To cover the budget deficit, this government began to issue incredible amounts of money, which led to hyperinflation. As a result, Zimbabwe returned to barter exchange. Similar experiences also exist during war.

The main conclusion that everyone should make for themselves is that slight inflation is a normal process, and in some cases even means economic growth. If a new money supply is poured into the country's economy, then at first this leads precisely to inflation, and then this money begins to move the economy forward, and an increase in production is observed. All this is possible only with proper management, otherwise the process will eventually get out of control.

Types of money

Over its long history, humanity has used a large number of different types of money. Initially, the material from which money was made was very important. They had to have the following types of properties:

• Divisibility and integrability. They must have the property of exchange, and also not change their value when combined.
• Qualitative uniformity. Separate copies of the same denomination should not have greater value.
• Portability. Low weight and volume and at the same time high cost. That is, these should not be three-meter stones with a hole in the middle. The world is striving for credit cards and electronic money with all their advantages and disadvantages.
• Storability. When stored for a long time, money should not physically deteriorate or change its chemical properties.
• Recognition. Money could be easily identified and its denomination understood.
• Safety. There must be protection against counterfeiting and theft.

In connection with all of the above, the type of money changed significantly and was refined, because ideally money should have had all these properties.

Commodity money

It is a product that has generally accepted value and utility. The main feature of such money is that it can be used not only as payment for goods. For example, a gold coin is valuable in itself and can be melted down and made into jewelry.

Therefore, at the dawn of economic development, the role of money was played by independent goods that would be useful to any person in any case - furs, pearls, livestock, grain, Cowrie shells, as well as bronze, copper, platinum, gold and silver coins. In Scotland, at one time, workers were paid with nails, and in Sudan, with spearheads and shovels. In prisons, cigarettes are the money.

Commodity money did not take root because it did not meet the same properties of ideal money - it was not portable, deteriorated during storage, and was difficult to divide and create. Therefore, over time, people began to invent money that was easy, quick and cheap to make.

Secured money

At their core, they are representatives of commodity money. You could receive signs or certificates and use them to exchange them for a certain amount of goods or commodity money. For example, in Ancient Sumer you could present figurines of baked clay sheep and goats and get live goats and sheep for them. Initially, even banknotes were considered backed by money, but then this function disappeared.

Fiat money

This is the same money that we currently use. They do not have independent value, but act as money, because the state has laws to consider them as such. Today, there are three forms of such money - banknotes, non-cash money in the bank and electronic money. Non-cash payments should not be confused with electronic ones, although they can eventually be deposited into a bank account. And banknotes are gradually being forced out of circulation.

Electronic money

They are used to pay for goods and services on the Internet and have the same value as real money. The development of this type of money became possible for many reasons, but the two main ones are earnings on the Internet by an individual and financial transactions between companies.

Electronic money has all the properties given earlier. In addition, they also have additional ones - they can be quickly counted, translated and divided. You can also pay bills automatically and you don’t even need to spend extra time. And since they do not exist in physical form, they cannot deteriorate and do not lose their qualities over time. The disadvantage is that almost all monetary transactions can be tracked, and many cases of theft are known. There is a joke that pretends to be true: if previously it took ten armed people to steal money, now one nerd with a laptop is enough.

Cryptocurrency

The most controversial currency, about which controversy still continues. Also, few people understand how it works and whether such money has a future. Let's talk specifically about Bitcoin, which is the most popular cryptocurrency.

A person does not pay a commission for transferring Bitcoin, that is, there are no intermediaries in principle. Almost complete anonymity is guaranteed, which of course can become (and has already become) a field of activity for various criminal transactions. In the Bitcoin system there is no person who manages it; all participants in the process are equal.

The disadvantage, in addition to the fact that cryptocurrency can become a weapon in the hands of various organizations, is that it is planned to release a limited number of bitcoins. At least because this is no longer a market principle and it can lead to many problems.

Bitcoin is also inherently an indicator of the level of trust in conspiracy theories. Cryptocurrencies in their advertising focus on Big Brother, which is constantly watching us and if we do not get out of its control, then financial slavery awaits humanity. To put it simply, with the mass adoption of Bitcoin, it is likely that the world’s banking system will collapse, or at least it will accept the rules of the game and change greatly. No one can say what will happen to the world economy if cryptocurrency wins. This is why cryptocurrency is so controversial and debates on this topic are still ongoing.

In this lesson we examined in detail the concept of money, its properties and depreciation. We looked at the history of the appearance of money and found out why money has the appearance it has now. Any financially literate person should understand these basics because any history of the subject has great importance in understanding the present and future.

In the next lesson, we will move directly to a topic that will allow you to learn how to relate to your finances, namely their planning and accounting. This is the basis and foundation on which any financial well-being rests.

Test your knowledge

If you want to test your knowledge on a topic this lesson, you can take a short test consisting of several questions. For each question, only 1 option can be correct. After you select one of the options, the system automatically moves on to the next question. The points you receive are affected by the correctness of your answers and the time spent on completion. Please note that the questions are different each time and the options are mixed.

They represent a single instrument through which economic relations are implemented in society. But in order for money to act as a real economic instrument, a whole series of requirements are put forward to it, which, in essence, depends on the level of development of socio-economic relations in society and the higher it is, the more complex the requirements are put forward to money, which ultimately creates the preconditions for their evolution. In order to meet these requirements, money must have a number of specific properties. At the moment, the most relevant ones are: properties of money:

• acceptability;
• cost stability;
• efficiency;
• duration of use;
• uniformity;
• divisibility;
• portability.

Eligibility

Having realized the need for money, society had to decide which item should be used in this capacity. Of course, at first such a decision is not made through a referendum or the adoption (approval) of a corresponding regulatory document by the state - it follows from practice: people begin to use a certain item as money, and this item de facto becomes, i.e. takes on the function of money. IN different times and have been used for this purpose in various places around the world. various items. Livestock (eg cows, sheep, camels) were used as money; popular goods such as cigarettes, fishing hooks, cocoa beans; objects valued for their beauty (diamonds, cowrie shells), as well as fancy things like boar teeth, etc.

The acceptability of any object as money is the first prerequisite for its use in this function. In this regard, our decision about what we would like to use as money does not matter. If the majority of people cannot be persuaded to accept a given item, then it will fail to fulfill its purpose.

Most items used as early forms of money had intrinsic value, determined either by the possibility of their use for other purposes, or by the demand for them due to their rarity. For example, some types of cowrie shells used as money had intrinsic value not because they could be used for some purpose, but because people simply wanted to have them for themselves.

Once people become accustomed to the idea of ​​using money, they are usually willing to use items that have only an exchange value that depends solely on the belief that the item will continue to be accepted by society at large. However, even in modern society resort to using valuable goods as money if the fragile balance of the economic system is disrupted or something interferes with its coordinated work. For example, in Europe immediately after the Second World War, many, having lost faith in “paper money”, refused to accept it. Soon, cigarettes, nylon stockings and chocolate began to appear as substitutes for money (among other items). These goods became money.

Cost stability

Stability of value is a basic property of money that allows a certain item to perform the functions of money. The stability of the value of the chosen form of money is an important factor in its acceptability. Any form of money, if it depreciates, cannot effectively perform and. Expected loss, for example, may discourage those who would like to accumulate funds, and they will either decide to spend the money immediately after receiving it, or decide to invest it in some other way.

The stability of money, which has only exchange value, depends to a large extent on public confidence in the constancy of its purchasing power. If this trust is broken, then the value of money can be destroyed. Money, which has intrinsic value, is protected from the extreme effects of inflation, but is susceptible to fluctuations in supply and demand for the commodity that underlies it. If the price of this product falls, the purchasing power of money will also decrease.

The amount of money offered in a certain form is of great importance for the stability of its value. In order for some kind of objects to function as money, these objects must be rare enough, but not so rare that there is a shortage of them in circulation, which would not allow for “economic turnover.” That's why we can't use tree leaves as money: it would be too easy to increase the value by simply picking them off the trees.

The money supply can also be affected by the activities of counterfeiters. If it is possible to make counterfeit money that cannot be distinguished from genuine money, then it will circulate like real money and in this sense will practically turn into real money. If the mass counterfeit money reaches enough large sizes, then this increases the money supply, which leads to the depreciation of money.

As the need for the accumulation of value and payment relations developed, society was forced to abandon all monetary forms with unstable value and recognize as money only those that at that time had a stable value. Countries that introduced gold money reached in the 19th century. huge economic successes.

However, as the economy developed and the world market formed, the stability of the value of gold turned out to be insufficient to ensure this property of money. Fluctuations in supply and demand for gold caused significant changes the value of full money. This was one of the reasons for the transition to, the stability of the cost of which can be maintained at the required level through the efforts of the state and interstate bodies. The main mechanism for solving this problem was management, which is implemented by the country, as a rule, in close cooperation with the actions of parliament. Thus, in our time, maintaining the stability of the value of money has become one of the key tasks of modern states.

Economical

An important property of money is its economy, which allows society to minimize the costs of producing money and meet the needs of circulation with it. While there was money, it was impossible to solve this problem, since reducing the costs of ensuring money circulation had an objective limit, which was determined by the internal value of the metal from which they were made. This circumstance served as an impetus for the conduct and emergence of inferior money. But even after this, the requirement to save money remains relevant. The production of defective ones requires quite significant expenses on the part of the state, and therefore cash in circulation is gradually being replaced. But ensuring the circulation of such money also requires certain expenses (for maintaining accounts, making payments, organizing, etc.). To reduce these costs, the movement of deposit money began to be carried out using electronic technologies.

Despite the intensive expansion of the scope of use of deposit (including) money, none of the countries can completely abandon cash.

Duration of use

An important way to ensure the efficiency of cash is the long-term use of it, which can be considered another property of money. Full-fledged money had this property, and now it’s cash. There is no reason to talk about this property for deposit (electronic) money, because they do not wear out during circulation.

To ensure long-term use of money, they are made from heavy-duty, wear-resistant paper, and some (especially small denominations) are made not only from paper, but also from metal (in the form of coins).

The most important requirement for paper money is durability, i.e. their resistance to fracture and tearing. Paper money in circulation is repeatedly bent (folded) and unbent. Therefore, paper samples used to make money must withstand (not tear) several thousand double folds (ordinary printed papers can withstand up to twenty double folds). High tensile strength must also be present. In addition to these important indicators, the wear resistance of paper is also characterized by its resistance to edge tearing. To ensure high quality and durability of the printed design, money paper must have the required degree of whiteness, opacity, smoothness, light fastness (should not change its color (whiteness) and reduce mechanical strength when exposed to light, sun rays). Resistance to “aging” is greatest for papers made from flax and cotton fibers. The ink layer on the paper should adhere well and be sufficiently resistant to abrasion.

Uniformity

Homogeneity of money is a property that is required of all forms of money, but not all forms provide it. The issue of homogeneity was especially acute when the bearer of money was ordinary goods (livestock, furs, jewelry, etc.), since each instance of such money was significantly different from the others. This lack of natural money was weakened by the transition to gold money. Gold coins became homogeneous and interchangeable. Quantitatively, the same amount of them in all cases represented the same value. However, the uniformity of gold money could be violated if there was a silver coin in circulation next to the gold coin, or the gold coins had unequal proportions of base metal impurities, or had different degrees of wear.

When money is in circulation different quality, everyone will naturally try to hold on to as much “good quality” money as possible and get rid of “low quality” money. For example, if some coins were made of gold and others were made of alloy, then everyone would try to spend only alloy coins and save the gold coins. Merchants would, of course, try not to accept payments in alloy coins, all because the intrinsic value of a gold coin would be higher than alloy coins.

There will always remain differences in the intrinsic value of heterogeneous forms of money. Thomas Gresham, the English Chancellor of the Exchequer in the time of Queen Elizabeth I, was the first to draw attention to the difficulties of using money of uneven quality and expressed his thought in a saying called , which reads: “ Bad money drives good money out of circulation».

With the transition to inferior money, the problem of their homogeneity was not completely removed, although on the surface all such money looks the same. In fact individual species money turns out to be heterogeneous due to different degrees of trust in their issuers, and, consequently, different degrees of their reliability. If trust in the central bank is higher than in commercial ones, then economic agents will give preference to cash over deposit money as more reliable.

The reliability of deposit money is also not the same, since each bank has its own level and. This heterogeneity was especially acute in the context of the economic and financial crisis that our country periodically experiences.

Divisibility

Money must also have the property of being divisible. To make purchases using small change, it is inconvenient to use large indivisible monetary units. The problem with using many items with intrinsic value as money was that by dividing them into smaller parts, the value of the individual parts was often significantly less than their value as a whole. There is a theory that during the Iron Age, ax heads were used as money. Part of the value of such money was determined by its possible use as instruments; but if they were divided into smaller parts, it useful property, naturally, disappeared. Likewise, it is difficult to divide live cattle into parts.

To make payments quickly, without additional costs, money should be easily divided into any parts. With this division, you can easily pay any amount, get change, and the like. To ensure this property, money of different denominations is made - from small to large, and the monetary unit is also divided into several identical parts, usually by 100. On this basis, small change coins of different denominations are issued, which makes it possible to divide the monetary unit into any parts.

Portability

Another property of money is its portability. They should be such that they are easy to wear and convenient to use in Everyday life. With each new form, which was acquired by money in the process historical development, their portability increased. Modern cash - banknotes and coins - are highly portable. However, this did not end the process of improving the portability of money. , which ensures the movement of deposit money, is much more portable than cash. A, which are used to transfer money via electronic communication channels, are even more portable than checkbooks.

§ “A product is a product” – since each product in the process of sale manifests its value in money.

§ Money is a specific product that acts as an equivalent.

§ This is the main thing actor in a market economy.

§ “The language of the market”.

The main stages of money development:

1. the appearance of money and the performance of its functions by ordinary goods.

2. assigning the role of a general equivalent to precious metals.

3. transition to paper and credit money.

4. transition to deposit and electronic money.

Functions of money:

1. A measure of value is a function in which money provides the expression and measurement of the value of a product, giving it the form of a price.

2. A medium of exchange is a function in which money is an intermediary in the exchange of goods and ensures their circulation.

3. A means of payment is a function in which money serves the repayment of various debt obligations between subjects of economic relations.

4. A store of value is a function in which money serves the accumulation of value in a general and abstract form.

5. World money is a function in which money ensures the movement of value in international economic circulation and ensures the implementation of relationships between countries.

Money turnover- movement of money in cash and non-cash forms when performing their functions.

The law of money circulation was formulated by K. Marx. He gave a scientific explanation of the connection between such economic indicators, as the money supply, the sum of the prices of goods and services, credit, cash and non-cash payments, the speed of circulation of money.

M = sumPQ-sumK+sumP-sumVP

M is the mass of money in circulation

sumPQ – the sum of prices of goods and services sold for a certain period

amountK – amount of sales of goods and services, credit

amountP – total amount of payments that are due

sumVP - the amount of payments that are repaid by mutual crediting of debts

V – velocity of money circulation

The basic principle of monetary circulation follows from the law of monetary circulation - this is the limitation of the money supply by the needs of trade turnover.

Monetary system is a form of organizing money circulation in the country, established by national laws.

Elements of the monetary system:

· The name of the monetary unit is established by law, taking into account the socio-economic and historical patterns of its development and serves to measure the prices of goods and services.

· Price scale – legislative fixation of the weight quantity of monetary metal (gold and silver), which is assigned by the state to a certain monetary unit.

· Regulation of non-cash payments – non-cash turnover carried out within the banking system and is regulated by the instructions of the board of the Central Bank and laws on banks and banking activities.

· Regulation of cash turnover – regulated by the above instructions and laws. The purpose of the regulation is to limit the number of non-fungible transactions and get away from counterfeiting banknotes.

· Regulation of foreign exchange turnover - the relationship between monetary units of different countries, used for exchanging currencies during foreign exchange transactions. Acts as the price of a given country's currency expressed in the currency of another country.

· Regulation of the banking process regime – ensures regulation of the price of money in the money market.

· State bodies regulating and controlling money circulation - the Central Bank, the government.

The evolution of money occurred from full-fledged to inferior.

Full-fledged money was money that had an internal real value, an adequate cost of the goods.

Defective money is money that only gains value through circulation.

Full money:

Commodity money (daily necessities, jewelry.)

Metal money (gold, silver)

Bad money:

Credit money:

*cash:

1.banknote

2.billon coin

3.bill

*non-cash:

1.traditional deposits

2.electronic deposits

A coin is a banknote issued by the state and made of metal.

Banknote is made of paper and represents bank notes issued. Central Bank of the state.

Deposit money is a type of bank money that does not have a physical expression and exists in the form of certain amounts in bank accounts and is used for non-cash payments.

Electronic money is a type of deposit money that exists in the computer’s memory and makes its movement automatically under the direct order of the owner of the flow account.

A billon coin is a small change coin minted from non- precious metals and is used in cash circulation.

Quasi money is a monetary form in which the monetary essence is significantly weakened and departs from generally accepted standard norms.

This includes a bill and a check:

A bill of exchange is a written promissory note giving the owner of the bill the right to demand from the debtor the amount of payment specified in it after the end of the specified period.

A check is a written order from the owner of a bank current account to pay a certain person the amount of money specified in it.

10.Market, its essence, functions, types and structure. The market mechanism and its elements. Features of the market mechanism in current economic models. Evolution and current models of market economics in developing countries. Market infrastructure, її main risks.