Money. Functions of money in a market economy

In modern society, a huge role is played by money. The functions of money, that is, the role they perform in a market economy, can not be overemphasized. Science defines them only five.

In the classical economic theory, money serves as a means of circulation, measures of value, means of payment, means of treasure formation, world money. Each of these we will describe in more detail below.

So, the money. The functions of money as measures of value are determined by their ability to be the equivalent of the value of any goods. This role is reflected in the price of any item or service. Thus, a certain number of banknotes corresponds to the true value of the goods, the costs of its production. This is the quantitative expression of all economic processes. With this function of money another economic term is associated - the scale of prices, which means a certain weight of precious metal, established by law as a monetary unit of the state.

As a medium of circulation, money acts as a kind of intermediary in trade in the process of exchange of goods, reflecting their exchange value. Since the middle of the last century, gold money has completely disappeared from circulation. They were replaced by paper notes, which in different countries have their own name and appearance. As a rule, these are paper bills and exchangeable coins of different denominations.

As a means of payment, money is also used. The functions of money in this role are the ability to repay any obligations (debt) between several economic entities. This function is valid when buying and selling goods on credit, when repaying a debt, paying salaries, taxes, and so on. Such securities as checks, banknotes, bills are related to it.

As a way of accumulating treasures, money temporarily interrupts its turnover, leaves the movement, accumulates and increases its value over time. The best way is to buy "real money" - gold, silver, platinum in the form of ingots. Also, the accumulation of luxury items made of precious metals, stones, jewelry. But you can save money and paper money, preferably in a banking institution with interest accrual.

Functions of money "world money" assume their use for servicing international trade, interstate economic relations. Previously, only gold was used for these purposes, but with the transition of society to paper money, the role of precious metal has greatly diminished. Today, for such money, they buy and sell goods on the international market, they are lent, if necessary.

Money, the function of money - is the object of close attention of all scientists. Western economic science holds the view that in the modern world money performs only three tasks: means of accumulation, accounting for value and means of circulation. And the function of "means of payment" has merged with the latter - "means of circulation". However, the role of money can not be underestimated.