Money

Money — the specific item possessing the highest liquidity, serving as a criterion of cost of other items and services.

Money proves through the functions. Usually allocate such functions of money as:

Exchange tool. Money allows to estimate one items at others according to Seius's law. It is the main function of money as valuable benefit.

Measure of value. Diverse items are equated and exchange among themselves on the basis of the price (coefficient of an exchange, cost of these items expressed in number of money). The price of item carries out the same measuring function, as in geometry length at pieces, in physics weight at bodies. For measurements it is not required to be down on that such space or weight, is enough to be able to compare required size to a standard. The monetary unit is a standard for items.

Currency. Money is used as the intermediary in the address of items. Ease and speed with which money can exchange on any other item are extremely important for this function (an indicator liquidity). When using money the producer has an opportunity, for example, to sell the item today, and to buy raw materials only every other day, week, month etc. At the same time he can sell the item in one place, and buy necessary to it absolutely in another. Thus, money as a currency overcomes temporary and spatial restrictions at an exchange.

Instrument of payment. Money is used at registration of debts and their payments. This function receives independent value for situations of unstable goods prices. For example, the item was bought on credit. The amount of debt is expressed in money, but not in number of the bought item. The subsequent changes in price for item do not influence any more an amount of debt which needs to be paid with money. Money carries out this function also at the monetary relations with financial bodies. A role, similar on sense, is played by money when in them express any economic indicators.

Means of accumulation. The money which is saved up, but is not used allows to transfer purchasing power from the present to the future. Function of means of accumulation is carried out by the money which is temporarily not participating in a turn. However it is necessary to consider that purchasing power of money depends on inflation.

World money. The foreign trade communications, the international loans, rendering services to the external partner caused emergence of world money. They function as general means of payment, general purchasing means and a general materialization of public wealth. As world money usually consider reserve currencies (now it is US dollar, Swiss franc, euro, the English pound, the Japanese yen). But money and other countries can be applied to direct international payments. For example, the CLS payment service provider allows to convert 17 currencies freely. Any of them carries out a role of the international means of payment — at least partially, world money.

Commodity (material, natural, valid, this) money — money as which the goods having the independent cost and usefulness act. Such goods can be used not only as money: for example, the gold coin can be melted into jewelry. Such money are all goods which acted as equivalents at the initial stages of development of the goods circulation (cattle, grain, furs, pearls, Cowry cockleshells, etc.), and also metallic currency — copper, bronze, silver, gold, platinum sound coins.

Adam Smith told that in his time (the 18th century) the custom has been widespread in some Scottish settlements between workers to pay dealers instead of a small coin in iron nails which willingly were accepted and had quite determined cost. The same speaks also to Chevalier about the coal districts of France. At the end of the 19th century Shveynfurt has found at the tribe of a bongo (in Sudan) use as money of iron tips of copies and a shovel.

Different goods carry out function of money in specific conditions also today. For example, cigarettes at prisoners and prisoners of war, vodka [12] and sugar during the periods of economic crises, the weapon and ammunition in places of armed conflicts. In the conditions of hunger and inflation products of long-term storage can become means of accumulation for prosperous people.

But gradually commodity money leaves turnover. They are inconvenient for the frequent address as they are too heavy, indivisible or spoil in case of storage. But the most important — they are too dear in production. The cost of their production shall correspond to their nominal, otherwise natural money will not carry out function of the ideal goods acting as an equivalent of cost of other goods. At the same time with development of economy the need for money increases that does cash system of the state too expensive. The cost of money in such economy is always comparable to the GDP sizes, that is too many resources go not for production of goods and services, and for production of money that reduces general potential production of the country.

Now commodity money is used as a store of value and for collections (an investment coin).

Secure (change, representative) money — money as which signs or certificates which can be exchanged on presentation for the fixed quantity of certain goods or commodity money, for example, for gold or silver act. Actually secure money is representatives of commodity money.

It is considered that the first secure money has appeared in Ancient Sumer where for payment figures of sheep and goats from the burned clay were used. These figures could be exchanged on presentation for live sheep and goats.

Originally banknotes certificated availability of the corresponding quantity of a sound coin and were secure money. However for today, after suspension of gold standard, banknotes are not guaranteed by an exchange for the fixed goods any more and have turned into symbolical money, having kept the former name.

Fiatny (symbolical, paper, dekretirovanny, artificial) money — the money which does not have independent cost or it is disproportionate to a nominal. Fiatny money has no value, but is capable to carry out functions of money as the state accepts them as tax payment, and also declares legal means of payment in the territory.

For today the main form the fiatnykh of money are banknotes and non-cash money which are on the bank account. At the same time the concept "non-cash money" is conditional as it is in essence about cashless (cashless) payments, that is about calculations of debtors with creditors without use of cash. In case of payments with cash the owner of banknotes (banknotes) directly uses them at discretion, and in case of cashless payments the authorized person imposes relevant requirements which execution does not depend on it any more to bank. [the source is not specified 369 days] Same the nefiatnykh of payment service providers (a kind of electronic money) treats cost units electronic.

With distribution of payment cards and electronic money of a banknote are gradually driven out of circulation.

Credit money is rights to claim in the future concerning physical persons or legal entities, the debt in a special way arranged, usually in the form of the transferred security which can be used for purchase of goods (services) or payment of own debts. Payment on such debts is usually made in a certain time though there are options when payment is made at any time on the first demand of. Credit money bears in themselves risk of non-execution of the requirement.

Examples of credit money: bill of exchange, check.