Modern money

Modern money, like banknotes that were in circulation many years ago, is a kind of conditional commodity. It is common for the whole equivalent, the measure of the price of a variety of goods and services. It is an essential part of the economy of each country and the world as a whole. The main functions of money express their essence as an economic category, their internal basis and content.

The most important function that they perform is their application as a measure of value. In this case, money expresses the price of absolutely all goods. However, it must be noted that goods commensurate make labor, which is spent directly on their production. In this case, the value of the product, expressed in money, is usually called the price.

Money also acts as a medium of circulation. So, during the turnover of goods, money must necessarily be present in reality. The circulation of products occurs according to this scheme: first, the sale of goods (T), that is, its conversion into money (D), which are then spent to purchase the necessary goods (T '). In fact, this scheme represents commodity and money relations: T-D-T '. Thus, banknotes play the role of intermediary and allow you to overcome the various boundaries that are present in the case of the exchange of goods for another commodity.

Any money can act as a means of accumulation and saving. Since they are the universal equivalent, the embodiment of wealth, it is quite natural that this encourages people to accumulate them. In this case, money is extracted from commodity-money circulation.

They were widely distributed as a means to effect payment. They are applied when there is a need to buy and sell goods on credit, that is, with installments. In this case, there is no counter movement of goods and money, repayment of the loan (debt) is the last stage in the process of buying and selling. Performing this function, modern money is increasingly presented in a non-cash form.

Also, one more feature, which the money is endowed with, is their use as a payment and purchasing means. They act as world money. They are used for calculations on international balances.

Modern money is usually divided into the following types:

- natural or commodity (in their quality, a product that is endowed with utility and value: cattle, furs, jewelry);

- secured money (in this form (signs, certificates), they can be exchanged for a certain amount of goods);

- fiatnye (implies the mismatch of their face value with the real, however, they are at the state level a means of payment: banknotes, non-cash money);

- Credit money (mostly securities, through which a special bond is issued , and through which you can make purchases).

Modern money in the course of its evolution has been studied and considered by different schools and their representatives for many centuries, and therefore it is customary to distinguish the following theory of money:

- metal (its followers saw the main function of money as a measure of value and opposed the addition of other metals in coins);

- Nominalist theory (assuming the value of money is determined by their denomination, in connection with which their function as a universal equivalent was denied and the function of the medium of circulation was maintained);

- monetary theory (it was believed that the market determines the purchasing power of the funds and the prices of goods, and the entire mass of money issued must be in circulation);

- Keynesian theory (John Keynes believed that with the change in income levels, the speed of money changes);

- Synthetic theory (combines elements of monetarism and Keynesianism, which should be based on competently built fiscal and monetary policy of the state).