In this article we consider such economic categories as money, their nature and function.Money - financial assets required for the transaction, ie the purchase of services and goods.Assets are anything that has value.Assets can be financial and real.Financial assets are divided into cash and non-cash (securities - stocks and bonds) and real assets - are tangible (real) value, such as buildings, furniture, equipment, appliances and so on.
Money relate to financial assets, but they differ in that they can handle transactions and represent a means of payment circulation.For example, you can not buy bread or milk, and instead pay a bond or a share.
is best manifested the essence of this category in terms of functions.Considering the money and their functions, it should be noted that the money is:
- medium of exchange.
- measure of deferred payments.
- reserves value.
- counts.
As a medium of exchange, they act as an intermediary in transactions in the exchange of goods.All you can buy for the money.An alternative to this exchange acts as barter.But the latter requires considerable costs.On the one hand, we have to bear the direct transaction costs, and the other - the loss of time and effort, that is, the opportunity cost.To barter took place must be provided with a plurality of conditions, including the condition of "double coincidence of wants" as he called William Stanley Jevons.
person who wants to buy a product or service has to find a seller who agrees to the goods produced by this individual.For example, a shoemaker who needs a loaf of bread, to find the baker, need new boots.The search for the second party can last a long time, but still not succeed.At the same time it will be spent and a lot of effort.Therefore, bartering is considered unsustainable and inefficient form of exchange.
money and their functions are the backbone of the economy and are considered one of the greatest inventions of mankind.The emergence of money as an intermediary in the exchange process has removed exchange costs and eliminate the problem of coincidence of wants.Now you can sell the product, getting money for it, and the proceeds buy other items.Property money easily and without additional cost sharing for another asset, financial or real, has been called the absolute liquidity.
Considering the money and their functions, it should be noted that the second function of money is that they are a unit of account, the meter values.That is, the measured value of a certain amount of money.Before the advent of the unit of account, the value of goods measured in a certain number of other goods.A man who wanted to buy a certain product, it was necessary to know well the proportions of this exchange, for example, what is the cost of bread in the sausage, shells, boots and so on.Since there were money, their feature sets the value only in comparison with one equivalent.
third function of money is that they are a means of payment.This feature is reflected in the fact that the money is used to pay for deferred payments.This function is possible since with time they retain their value.This is the fourth feature - the stock value.Value for money is their purchasing power and liquidity.At any time, they can purchase any product, service.However, in terms of inflation over time will lose the value of money, purchasing power will decline.
Considering the money and their functions, it should be noted that the most important is the first - a means of treatment.But all functions are interdependent and interrelated.
