What do you do, or what do you do Capital? Currently, it is a contractual payment method, and it is also a commodity. Subject to exchange for other goods. Nowadays, it can be physical (such as metal, metal, and paper money), immaterial (such as electronic) or non-cash (such as checks, bills of exchange, and bonds). Thanks to it, it is possible to easily determine the value of products or services, exchange goods, pay or store savings for future use. Money separates the transfer of goods and payment for them.
Before money was created, people traded in barter among themselves i.e. product for product. Typically, manufacturers used barter trade, such as grain for pigs and salt for leather. However, it presented many difficulties. Sometimes it was not easy to determine the value of a particular commodity. If someone eats salt and the other wants to replace it with meat instead of skins, it is not replaced. So the need arose for neutral payment methodsthat each party to the transaction will accept. In other words, an intermediate link was necessary – at first they were made of money (such as shells, amber or linen). Then there were non-standard pieces of ore (including gold and silver), then bars, and finally Capital in the form of coins.
See also: Economics – the study of the laws that govern production
Where does the money come from? What is paper money?
central bank It is a government institution to issue CapitalBut also conduct monetary policy. It tries to ensure that the value of this means of payment does not fall excessively and that prices remain stable. In Poland, the National Bank of Poland performs this function. Enter the circulating currency (physical medium, such as bank notes or coins) that is legal tender.
There is a concept related to the issue of money Capital Asset Allocation Consultant. Previously, units of thrust had an analogue in the weight of the metal, such as gold. In this system, the source of cash provided a guarantee. He said he would exchange it for gold of the same weight. Capital Fiats (like the Polish zloty), which citizens currently deal with, are based not on material goods, but on trust in the issuer.
Money – its improvement and its functions
Cash as a contractual payment has many functions, and therefore it has been improved over the years. It is important that it is small, suitable for long storage, durable and resistant to various conditions. These requirements were met, for example, by gold. However, its divisibility and lightness were also important. Over the years, it has also become easier and easier to produce – which is why banknotes and coins exist nowadays.
Capital He performed and continues to perform many important functions. considered to be:
- exchange average,
- A financial instrument for transferring payments,
- a measure of the value of goods,
- deferred payment arrangement,
- method of collecting savings (hoarding),
- A tool for exchange between countries.
The functions of money – the medium of exchange and the financial instrument
Capital As average exchange. It is the oldest and simplest application of it – it mediates money-for-goods transactions. One side donates the product and Capital change owner. For the money received, you can exchange for other goods. It is similar to work – the employer, in exchange, gives the employee a contractual means of payment, and buys, for example, food.
Capital It can be used as a financial instrument for transferring payments (eg by government) or such exchange transactions that are deferred over time. These include, for example, pensions, benefits, gas supply and the Internet. A business is also a contract in which payment is made late (eg once a month).
See also: Economic calculation – a well-thought-out financial policy in the company
Money functions – measure the value of goods and measure deferred payments
Payment methods as is Capitalcan be specific to the price – this Measuring the value of merchandise. In the old days, when the trading of commodities for commodities was common, it was not easy to determine the exact value of a commodity (for example, whether the cost of hunting a deer equaled four barrels of wine). The unit of money accurately determines the price of the goods in question. This makes it easy to compare.
After moving Capital There was a faster development of trade. Its other function is deferred payment arrangement. This procedure allows you to accurately determine, for example, the value that the investor will receive after the termination of the investment in treasury bonds, and the value that the bank will receive at the expiration of the loan maturity.
Functions of safekeeping and exchange tool between countries
The payment methods discussed are helpful like Method of Accumulation of Savings (Hoarding). suppression Capital For the future It helps in purchasing goods or services, say in one or five years. You just need to refrain from issuing it regularly. To facilitate this, deposits, savings accounts, bonds and many other methods were invented. This payment method is also used replacement tool between countries. Almost every country has its own currency. Some are stronger and some are weaker. Stable and high-value funds from developed countries play the role of the international medium of settlement. You can mention the Swiss franc, the US dollar, or the euro here.
Payment methods currently usedCapital) are no longer covered with gold or other metals. It is based on trust in the government and the central bank that issues it. It has many functions – incl. A measure of the value of goods and a means of exchanging goods.