First, let us define what money is: their essence is that it is the universal equivalent of the cost of other services and goods.
In those days when surplus goods appeared, a universal means of payment was required. Initially, people produced what was necessary for their needs, some changed food for clothes and vice versa. Over time, the exchange process began to become popular, then there was a need to create such a product that could serve as a means of payment for any other type of service. So there was money.
Essence
The essence of money is divided into 5 points:
- means of saving and accumulation;
- means of payment;
- means of circulation ;
- measures of value;
- world money.
Let us dwell on each of the points.
The measure of value
Appears at the time the price arises, determining the cost of the service or product. Cash value changes (price), it depends on the following indicators:
- exchange conditions;
- production conditions.
The medium of circulation is money
The essence of the means of payment is that it is beneficial for the two parties (seller-buyer) to make an exchange. And money is an intermediary in a transaction. In addition to being a medium of exchange, it is also a functional means of settlement (loans, mortgages, loans). The latter was the beginning of the emergence of plastic cards.
Instrument of payment
If there is not enough money to pay for a product or service, then it is possible to take what is needed on credit or with a deferred payment: goods-deferral-money or goods-credit-money.
World money
The essence of money is that it is used for international settlements. Today, the main international unit of payment is the dollar.
Types of money
They are divided into two groups: cash and cashless. Further divided into six subgroups.
Cash:
- small coin;
- paper money;
- credit (cards) money.
Cashless:
- credit cards (plastic);
- payment cards (plastic);
- electronic finance.
Consider some of the subgroups in detail.
Paper money includes treasury tickets, which are issued by the state, have no value as tangible. But they are used in all calculations and payments. Also related to paper money are bills.
Credit money is checks, bills, banknotes.
Electronic financial means are money, the essence of which is that they can pay for purchases / bills on the Internet, that is, they are located in an electronic payment system (Webmani, Yandex-money, etc.) and in bank accounts in electronic form .
Functions of Money
1. Money is a universal opportunity to assess the value of goods (a measure of value).
2. Money is a universal means of purchase (medium of circulation).
3. Distribution function. It implies a transfer from owner to recipient.
4. Savings and savings.
5. Currency exchange.
Conclusion
This article discloses what money, types, essence, functions are. Means of payment are needed to service the national economy. Their main function is to pay for goods and services. The type of money depends on the material of manufacture.