Money is a means of expressing the value of goods and services that exist today in our world. This definition is based on the concepts of value, which is most common in world science.
One can also consider another concept, according to which money is a completely liquid medium of exchange. They have two qualities:
- exchanged for any product;
- are able to change the value of this product.
The essence of the function and the types of money
The essence of cash is in their basic functions.
- Measure of value. It is determined by using the price for each type of goods and is measured in terms of money. As measures of prices, money can act even as figures.
- Means of circulation. As you understand, the expression of the value of the goods does not yet mean its sale on the market. Earlier when the economy was less developed, money served as an exchange of a certain amount for some kind of commodity. Now with the emergence of loans, the function of the means of payment comes to the forefront.
- Means of payment. The essence of this concept is that the time of purchase of products or services may not coincide with the time of payment for them, since the purchase can be made in installments or on credit.
- Means of saving and accumulation. They act as a monetary reserve.
- World money. Created for use in international settlements.
Types of money and their features
There are several basic types of money.
- Real money - their nominative value coincides with their real value, that is, the cost of the material from which they are made. Here we have in mind previously very common metal, gold or silver coins. The feature of real money is their stability, which was ensured by a free exchange of signs of value for gold coins.
- Substitutes of real money - the sum of their nominative value is higher than the real one, that is, their price is equivalent to the social labor spent on their production.
The essence and types of modern money
Modern types of money - these are the material means that allow us to purchase goods and services in the modern world. Recently, electronic money has also been included in this form. They are stored on electronic purses and allow their owners to pay for their purchases on the Internet.
- Paper money - representatives of real money. They are made of special paper and are issued by the state, or rather the state treasury to cover their expenses.
- Credit money - appeared in connection with the performance of money by the function of the means of payment, while with the development of commodity-money relations, purchase and sale began to be carried out with payment by installments or on credit. In other words, this is money that can be borrowed from a bank or other financial structures. The truth is, because of the interest to get rid of debts taken in this way will be very difficult.
Types of cash - it's coins and banknotes, in other words, the money that you can directly touch and pay them in the store.
Types of paper money
Paper money is also represented, as already mentioned, in the form of banknotes. There are many types of paper money, among which are:
- Euro;
- Rubles;
- Dollars;
- Pounds sterling, etc.
Paper money has two functions:
- means of circulation;
- means of payment.
Defective money - types
Defective money is a sign of value. They lose their commodity nature and do not have their own
So, we looked at the types of money and money, and as it turned out their classification is not so simple as it seems at first glance. One can say with certainty only one thing: "The world is owned by those who own money."