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What is the money?

Alexey Ganzenko
Alexey Ganzenko
March 20, 2013
What is the money?

Banknotes that replace the so-called "real money", are called signs of value. Their nominal value far exceeds the real one. What is the money? In addition to ordinary coins, metal coins include bill coins, worn gold coins, coins of small denomination, made of inexpensive metal (aluminum, copper). Signs of value, made of paper, in turn, are divided into two groups: credit and paper.

What are the kinds of paper money

Ordinary paper money is real money, in other words - money used by us in everyday life. Only the state has the right to issue paper money. There are two main functions of paper money: they are a means of payment and a means of circulation. Paper money is gradually depreciating.

  • Credit money. The development of production caused the need to conduct trade operations with a deferred payment, goods began to be bought on credit. Thus, there was credit money.The role of credit money is carried out by money capital, since credit money cannot express the relationship between market goods, they are capable of expressing only the ratio of money capital.
  • Bills of exchange. The bill is an unconditional written obligation of the debtor, guaranteeing the payment of a specified amount of money in a specified period in the prescribed place. There are two types of bills: a promissory note and a transfer.
  • Banknotes. Banknotes are paper money issued into circulation exclusively by the central bank of a state. Initially, the banknotes were provided with two guarantees: a commercial one, since they were issued in circulation, relying on commercial bills directly related to the turnover of goods; and a gold guarantee for the exchange of banknotes for gold. This banknote was called classic, it had a high level of stability and was very reliable.
  • Check. A check is a monetary document containing an unconditional order of the account holder in a credit institution to pay the applicant a specified amount of money.

What money is still

This is electronic money, which is a type of money stored in electronic devices (on the client's account) as a set of numbers.If desired, the user, they are displayed in real money through special services and systems. The presence of electronic computers in credit institutions triggered the replacement of checks with credit cards. This card has a built-in chip and confirms the account of its owner.


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