Money, money circulation and credit - стр. 6

There are a lot of approaches of money determination. For example they could be rendered as a special good which plays role of a universal equivalent. This description remains actual for the long term though in the modem economic literature we can meet the other descriptions which usually indicate the other separate functions or peculiarities of money.

Money – metal and/or paper are the standards of value during the purchase and sale deal which play role of a universal equivalent, i.e. they express the value of all of the goods and are exchanged on any of them. (Shorter Economics Dictionary / under the editorship of A.N. Azriliyan – M., 2000).

Paul A. Samuelson writes that the flow of money is the source of life power, money provide the measuring rod of value. Besides money act as a medium of exchange and as standard unit of value or account. (Paul A. Samuelson «Economics» – M., 1992 – T. 1., – p. 40, p. 47).

According to the evolutional theory we can give the following description of money: Money are the historically developing economic category which expresses the definite economic relations between people in the process of production and distribution.

The essence of money consists of their features:

The universal immediate exchangeability – the possibility to exchange money onto any items of value.

The independent form of exchanged value which is not connected directly with realization of goods. The most significant cases of money usage in this form are credit accommodation, loan indebtedness redemption, financing of various manufacturing and nonmanufacturing costs, etc.

The materialization of the universal labor time is that labor spent on the goods production creates their value which could be changed by means of money.

The generation of money and their usage led to the great consequences. Money generation allowed to overcome the narrow bounds of mutual exchange of separate producers by means of goods and to create conditions for market generation in the operations of which many owners of different goods can take part. It provided the further development of production and improvement of its effectiveness.

The fact of money usage has a considerable importance because thanks to which appeared an opportunity to separate a nonrecurrent process of the goods’ mutual exchange (G-G) on two asynchronically implemented processes:

– the first consists of the good sale (G-M);

– the second consists of the required good purchase in another time and in another place (M-G).