House Morcane

monetniydvor · Joined: 31 May 2012 Posts: 1 Location: Russia

Money - a specific product which is the universal equivalent of the cost of other goods or services.
The main functions of money

Money is manifested through its functions. Usually distinguished features such as money:

The measure of value. Heterogeneous products are equal to each other and exchanged on the basis of price (exchange rate, cost of goods denominated in the amount of money). Price of the product performs the same measurement role, as in the geometry of the length of a line segments in the physics of the weight of the bodies. For the measurement does not require a thorough knowledge of what the space or weight, sufficient to be able to compare the unknown quantity with a standard. The monetary unit is the standard for the goods.
Medium of exchange. Money is used as an intermediary to handle the goods. This function is extremely important in the ease and speed with which money can be exchanged for any other product (a measure of liquidity). When you use the money commodity producer is able to, for example, sell their products today and buy raw materials only after day, week, month, etc. In doing so he can sell his goods in one place, and you want to buy it at all in another. Thus, money as a means to overcome the temporary treatment? E and space constraints in the exchange.
Means of payment. The money is used for registration and payment of debts. This function takes an independent value for the management of unstable commodity prices. For example, was bought on credit products. Amount of the debt is expressed in money, but not the amount of goods purchased. Subsequent changes in the price of the goods does not affect the amount of debt that must be paid in cash. This function money performs well when monetary relationships with the financial authorities. A similar role is played within the meaning of money, when they express any economic indicators.
Means of accumulation. The money collected but not used, allow to transfer purchasing power from the present into the future. Perform the function of a means of accumulating money, temporarily not involved in the turnover. However, keep in mind that the purchasing power of money depends on inflation.
World money. Foreign trade relations, international loans, the provision of services outside partner led to the appearance of world money. They function as a universal means of payment, the general purchasing agent and general materialization of social wealth.

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