Автор: Пользователь скрыл имя, 07 Мая 2011 в 14:05, реферат
Money is an intrinsic part of our life. By money we mean any commodity generally accepted in payment for goods, services, & debts. The main use of money is makes the trading process simpler & more efficient, but actually money has various uses in the modern world & various functions.
The Ministry of Education of the Azerbaijan Republic
Azerbaijan State Economic University
The ESSAY
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Money is an intrinsic part of our life. By money we mean any commodity generally accepted in payment for goods, services, & debts. The main use of money is makes the trading process simpler & more efficient, but actually money has various uses in the modern world & various functions.
Money, as the medium of exchange, is used in one-half of almost all exchange. Workers exchange labour services for money. Poeple buy & sell goods in exchange for money. We accept money not to consume it directly but bacause it can subsequently be used to buy things we do wish to consume. Money is the medium through which people exchange goods & services.
A barter economy has no medium of exchange. Goods are traded directly or swapped for other goods. In a barter economy, the seller & the buyer each must want something the other has to offer. Each person is simultaneously a seller & a buyer. In order to see a film, you must hand over in exchange a good or service that the cinema manager wants. There has to be a double coincidence of wants. You have to find a cinema where the manager wants what you have to offer in exchange.
Trading is very expensive in a barter economy. People must spend a lot of time & effort finding others with whom they can make mutually satisfactory swaps. Since time & effort are scarce resources, a barter economy is wastful.
Although the crutial feature of money is its acceptance as the means of payment & medium of exchange, other functions are also in great importance. Money can also serve as a standart of value. Society considers it convenient to use a monetary unit to determine relative costs of different goods & services. In this function money appears as the unit of account, is the unit in which prices & quoted & accounts are kept.
In the past most societies used different objects as money. Some of these were valuable because they were rare & beautiful, others – because they could be eaten or used. Early forms of money like these were used to buy goods. They were also used to pay for marriages, fines & debts. But although everyday objects were extremely practical kinds of cash in many ways, they had some disadvantages too. For example, it was difficult to measure their value accurately, devide some of them into a wide range of amounts, keep some of them for a long time, use them to make financial plans for the future. For the reasons such as these, some societies began to use another kind of money, that is precious metals.
People used gold, gold bullion, as money. Those were dangerous times, & people wanted a safe place to keep their gold. So they deposited it with goldsmiths, people who worked with gold for jewellery & so on & also had a guarded vault to keep it safe in. & when people wanted some of their gold to pay for things with, they went & fetched it from goldsmith. The goldsmith bankers were an early examples of a financial intermediary.
A financial intermediary is an institution that specializes in bringing lenders & borrowers together.Banks are not the only financial intermediaries. Insurance companies, pension funds, & building societies also take money in order to relend it. The crucial feature of banks is that some of their liabilities are used as a means of payment, & are therefore part of the money stock.
There can be different types of banks.
Central banks supervise the banking system, the fix minimum interest rate, issue bank notes, control the money supply, influence exchange rates, & act as lender of last resort.
Commercial banks are businesses that trade in money. They borrow money from the public, crediting them with a deposit. The deposit is a liability of a bank. It is money owed to depositors. In turn the bank lends money to the firms, households or governments wishing to borrow. Commercial banks are financial intermediaries with a government license to make loans & issue deposits, including deposits against which cheques can be written.
There are also supranational banks such as World Bank or the European Bank for Reconstruction & Development, which are generally concerned with economic development.
There are a lot of different types of banks, but also we can talk about different kinds of money. (This classification is mostly based on the functions of money).
In prisoner-of-war camps, cigarettes served as money. In the 19th century money was mainly gold & silver coins. These are examples of commodity money, ordinary goods with industrial uses (gold) & consumption uses (cigarettes), which also serve as a medium of exchange. To use a commodity money, society must either cut back on other uses of that commodity or devote scarce resources to producing additional quantities of the commodity. But there are less expensive ways for society to produce money.
A token money is a means of payment whose value or purchasing power as money greatly exceeds its cost of production or value in uses other than as money. The essential condition for the survival of token money is the restriction of the right to supply it. Private production is illegal. Society enforces the use of token money by making it legal tender. The law says it must be acceptable as a means of payment.
Each country has its own national currency, but there is such a phenomenon as euro – it’s European currency, which is acceptable in the 12 countries of European Union. On 1 January 2002, the euro, which has been adopted in 1999, started circulating in notes & coins. This was a historical moment in the integration of Europe. From 1 January 2002 the euro existed as cash, but before it it could be used only for banks & financial transaction.
What are the advantages of the euro?