Types of money and the concept of money circulation
Money in its development comes in two forms:
1. valid – money whose nominal value (marked on it) corresponds to the real value of the metal from which it is made. They are stable and thanks to this they perform all 5 functions,
2. substitutes for real money (signs of value) - money, the nominal value of which is higher than the real value, that is, the social labor spent on its production.
These include:
· metal signs of value,
· paper signs of value (paper and credit money).
Paper money - These are signs, representatives of full-fledged money that arose historically from metal circulation.
The first paper money appeared in China in the 12th century, and in Europe in 1769. Paper money serves as a means of purchase and payment, that is, it performs 2 functions. Issuers of paper money are either the state (state treasury) or the Central Bank. By their economic nature, paper money is unstable and subject to inflation. Instability is due to the fact that the issue of money is regulated not so much by the need for trade turnover in it, but rather by the constantly growing needs of the state for financial resources, so paper money cannot serve as a treasure.
The disadvantages inherent in paper money can be eliminated with the help of credit money.
Credit money arise when the purchase and sale is carried out with payment in installments. The emergence of credit money is associated with its function as a means of payment.
Electronic money – This is money in the calculations of the computer memory of banks, which is managed using a special electronic device.
Credit cards – This is a means of payment that replaces cash and checks, and also allows you to obtain a short-term loan from a bank.
Money circulation is the movement of money in the internal economic circulation of the country, in the system of foreign economic relations in cash and non-cash forms, serving the sale of goods and services, as well as non-commodity payments.
Methods of regulating money circulation
Monetary regulation – These are government measures designed to ensure that the amount of money corresponds to the objective needs of economic development.
The methods of monetary policy of the Central Bank of the Russian Federation are an important element of the country's monetary system. The main ones:
Establishing benchmarks for money supply growth;
Foreign exchange regulation, including foreign exchange interventions;
Refinancing of credit operations by establishing a refinancing discount rate;
Establishment of standards for required reserves of commercial banks deposited by the Central Bank of the Russian Federation;
Establishment by the Central Bank of the Russian Federation of interest rates on transactions;
Strengthening the stability of the national currency;
Issue of securities on one's own behalf;
Carrying out credit expansion and credit restriction taking into account changes in the general economic policy of the state;
Improving settlement and payment methods.
Cash and non-cash money circulation
Cash circulation – This is the movement of cash in the sphere of circulation and the performance of two functions by it (a means of payment and a medium of circulation). Cash is used in purchase and sale transactions between individuals; in payments by individuals for utilities, in the payment of insurance compensation under policyholder contracts, in calculations for the payment of wages, bonuses, pensions, benefits, stipends, in calculations of procurement organizations of the consumer cooperation system with the population.
Non-cash money circulation – This is the movement of value without the participation of cash: transfer of funds to the accounts of credit institutions, offset of mutual claims. The development of the credit system and the appearance of funds in accounts in banks and other credit institutions led to the emergence of such treatment.
The main instruments of non-cash circulation are: securities (bills, checks), credit cards.
* currency unit - it is a historically established, legally established unit of measurement of the amount of money, prices, goods and services,
* money supply – this is the sum of cash and non-cash funds, as well as other means of payment,
* money-credit policy - this is a set of monetary instruments (reserve norms, interest levels, loan terms, money supply parameters, etc.) and monetary regulation institutions (Central Bank of the Russian Federation, Ministry of Finance, etc.).
Functions of money and the law of monetary circulation
The function of money as a measure of value. Money is the unit of account, that is, the unit on the basis of which prices are set and accounts are kept. The assessment of goods, works, and services is carried out in prices, and prices are set in state monetary units (in the Russian Federation in rubles).
The function of money as a medium of exchange. Money is an intermediary in purchase and sale transactions.
The function of money as a means of accumulation and savings. Without this function, economic growth is not possible, but in order to save a certain amount in the state, the initial level of purchasing power must be maintained for a long period.
The function of money as a means of payment. Due to certain circumstances, goods are not always sold for cash. As a result, there is a need for purchase and sale with installment payment, i.e. on credit.
Function of world money. This function is implemented in the process of servicing economic relations between countries. Convertible currencies are increasingly being used as world money.
Law of money circulation
The law of monetary circulation, discovered by K. Marx, establishes the amount of money needed to perform the functions of a medium of exchange and a means of payment.
The amount of money required to fulfill the function of money as a medium of exchange depends on three factors:
1. the number of goods and services sold on the market (direct connection),
2. level of prices of goods and tariffs (direct connection),
3. velocity of money circulation (inverse relationship).
The amount of money for circulation and payment is determined by the following conditions:
1. the total volume of goods and services in circulation (direct relationship),
2. the level of commodity prices and tariffs for services (the relationship is direct, since the higher the prices, the more money is required),
3. degree of development of non-cash payments (reverse relationship),
4. speed of circulation of money, including credit (reverse relationship).
The mathematical formula for the law of monetary circulation is as follows: D = (P – K + P – V) / O, where:
D - amount of money (money supply), P - sum of prices of goods (services, works) to be sold, K - sum of prices of goods (services, works), payments for which extend beyond a given period of time (i.e. sold in installment plan), P - the sum of prices of goods (services, works), the payment terms for which have already arrived, B - the amount of mutually repayable payments, O - the speed of money turnover for a given period of time.
Inflation, its forms of manifestation, types and types
Inflation – This is a crisis state of the monetary system that arose in the mid-18th century, due to the huge issue of paper money.
Forms of manifestation of inflation
1. uneven rise in prices for goods and services,
2. depreciation of the money supply,
3. depreciation of the national currency against foreign currency,
4. increase in the price of gold, expressed in national currency.
Factors of inflation
1. disproportion between various spheres of the national economy:
accumulation and consumption,
supply and demand,
state expenses and revenues,
money supply and state needs,
credit expansion (conquest).
2. public finance crisis:
budget deficit,
growth of public debt,
emission of money.
3. global currency crises:
raw materials,
energy,
currency.
Types of inflation
1. moderate (creeping). The annual rate of price growth is from 3-10%. Typical for economically developed countries. They consider it as a production incentive.
2. Galloping – average annual price growth rates from 20-100%, sometimes up to 200%. Prevalent in developing countries and causing concern in society.
3. hyperinflation - a price increase of more than 1000% per year or more than 50% per week. It arises as a result of the breakdown of the entire economic structure of the country and leads to the disorganization of production and the market.
Types of inflation
1. demand inflation occurs when there is excess demand, i.e. supply is less than demand. There is a shortage of products on the market, which leads to a sharp rise in prices. There is a lot of money with a small number of goods, production does not satisfy the needs of the population. Consequently, there is excess demand.
2. cost-push inflation occurs when the costs of producing goods and providing services increases at a rapid pace under the influence of the specific development of production and state activities. An increase in production costs leads to an increase in prices.
Types of securities
The main types of securities are: shares, bonds, as well as other financial instruments: bills, certificates, mortgages, warrants, options, futures, etc.
Promotion - This is a type of security issued by a joint-stock company; it indicates the contribution of certain funds to the property of the joint-stock company and certifies the ownership of its owners to a share in the authorized capital.
Shares are issued for an unlimited period and are not subject to redemption. The shareholder is responsible for the obligations of the JSC only with his contribution. In the event of bankruptcy of this enterprise, the shareholder risks losing only the money he spent on purchasing the shares. The issue of shares can be carried out in a certain ratio to the amount of the authorized capital.
A share gives its owner the right to receive part of the profit (dividend) from the activities of the joint-stock company and to participate in its management.
Dividend – annual income accrued by decision of the shareholders' meeting on each share.
Primary paper, issue paper. Reselling it requires making changes to the register of shareholders, equity, perpetual, non-state, usually registered.
Shares come in both documentary and uncertificated forms.
Most of the shares - ordinary ones - give the right to participate in the management of the joint-stock company; preferred shares - give the right to a certain share of the assets of the enterprise upon its liquidation, but do not have a preemptive right to purchase securities during an additional issue (fixed dividends).
Shares may be freely tradable and have restrictions on the manner of circulation.
Bond – a debt security that generates income in the form of interest, on which the term of its limitation is indicated.
Bonds, as a rule, are primary, but can also be secondary (mortgage bonds), also state and non-state, income and non-income, documentary and non-documentary.
A bond is an issue-grade security, usually a fixed-term one.
Bonds can be government loans, local loans – municipal bonds of business entities.
The bond always has a declared face value, at which it is redeemed, sometimes together with the payment of the last part of the stipulated percentage of income.
A bond, like a share, has a nominal, issue and market value.
Bonds can be issued by the state or a joint stock company; they are debt obligations. The income from bonds issued by the government is paid in the form of winnings. On bonds issued by a joint-stock company, income is paid in the form of a fixed percentage of the nominal value. Bonds differ from shares in that their owners are not members of the joint stock company and do not have voting rights.
Bill – unconditional written monetary obligation of the debtor to repay the debt. It has a documentary form, a period is set, and can be personal or warrant. Bill of exchange – income in the form of interest or discount.
Savings (deposit) certificates – written certificates of the issuing bank on the deposit of funds, certifying the right of the depositor to receive, upon expiration of the established period, the amount of the deposit and interest on it.
Certificates enable banks to attract free funds and can be resold on the secondary market.
Mortgages(mortgage securities) - securities, documents on the debtor's pledge of real estate (land, buildings), giving the creditor the right to sell the pledged property in case of failure to pay the debt on time.
The mortgage must indicate the loan or other agreement, the execution of which is secured by the mortgage.
Warrant – a certificate giving its owner the right to purchase securities at the price stipulated by the agreement for a certain period of time or indefinitely.
Option- a contract providing for the right of the person who purchased the option to, within a certain period of time, buy at a set price a specified number of shares from the person who sold the option. An option gives the right not only to buy, but also to sell securities.
Futures – a transaction concluded on the stock exchange, providing for the purchase and sale of securities at a price fixed at the time of conclusion of the transaction, with the payment of a sum of money after a certain period of time. Unlike an option, a futures contract is not a right, but an obligation to buy and sell.
Voucher(privatization check) - a security giving the right to a share of state property.
Signs of finance
1. monetary relations between two entities;
2. subjects have different rights in the process of these relations;
3. in the process of these relations, a national fund of funds is formed - the budget;
4. regular receipt of funds into the budget was made thanks to taxes, fees and other payments of a state compulsory nature, which is achieved through the legal rule-making activities of the state.
Stages of financial development
1. undeveloped financial system - the bulk of funds (1/3 of the budget) were spent on military purposes and had virtually no impact on the economy.
2. a wide variety of financial relations has appeared - finance is becoming one of the most important foundations of indirect influence on relations of social reproduction, incl. reproduction of material goods of the labor force and production relations.
The first national fund became the state budget, where the main source of revenue is taxes.
Taxes can be direct and indirect.
The second largest national fund of funds became the state property and personal insurance fund.
Purpose of finance
1.they express monetary relations,
2. meet the needs of the state and the enterprise in funds,
3. control the spending of these funds.
In terms of its material content, finance is targeted funds of funds, which together represent the country’s resources. The main condition for the growth of financial resources is an increase in national income.
The essence of finance is manifested in its functions.
Finance functions
1. distribution- manifests itself in the distribution of national income, when basic or primary incomes are created. Their amount is equal to national income; they are formed during the distribution of national income among participants in material production (group 1 - workers, office workers, farmers, peasants and group 2 - enterprises in the sphere of material production).
Further distribution or redistribution of national income is necessary, as a result of which secondary or productive incomes are formed. These include income received in non-production sectors and taxes. Secondary incomes serve to form the final proportions of the use of national income.
2. stimulating – is to influence the development of enterprises and industries in the direction desired by society. That is, the state, through the distribution of monetary funds, can effectively stimulate or restrain the development of a particular economic process.
3. control – manifests itself in tracking the distribution of GDP by relevant funds and intended purpose.
The concept of “financial system” is used in two meanings:
1.as a set of institutions involved in monetary transactions (funds, companies, banks),
2.as a system of financial relations; Moreover, the concept of “system” presupposes the presence of connections.
Financial system is a set of different spheres (links) of financial relations, each of which is characterized by features in the formation and use of funds of funds and plays a different role in social reproduction.
Each link of the financial system represents a certain sphere of financial relations, and the financial system as a whole is a set of various spheres of financial relations, in the process of which funds of funds are formed and used.
Centralized finance – These are economic monetary relations associated with the formation and use of state funds concentrated in the state budget system and government extra-budgetary funds.
Decentralized Finance – These are monetary relations that allow the circulation of the enterprise’s funds.
Thus, centralized finance is used to regulate the economy and social relations at the macro level, and decentralized finance at the micro level.
Financial system - This is a system of forms and methods of education, distribution and use of state and enterprise funds.
If we imagine the financial system as a network of institutions, then we can distinguish 3 levels:
1. Federal level (Ministry of Finance),
2. Subjects of the Federation (financial departments and financial departments under the regional Ministry of Finance),
3. District level (district financial departments).
All of them are involved in developing and executing the budget.
Financial system of Russia includes the following links of financial relations:
The state budget is the main link of the financial system. It is a form of formation and use of a centralized fund of funds to ensure the functions of public authorities. The state budget is the main financial plan of the country, approved by the Federal Assembly as a law. Through the state budget, the state concentrates a significant share of national income to finance the national economy, socio-cultural events, strengthening the country's defense and maintaining state authorities and administration.
Off-budget funds – These are funds from the federal government and local authorities associated with the financing of expenses not included in the budget. The formation of extra-budgetary funds is carried out through mandatory target contributions. The main amounts of contributions to extra-budgetary funds are included in the cost price and are set as a percentage of the wage fund.
The main ones in size and importance are social funds - the pension fund, the social insurance fund, the state employment fund, the federal compulsory health insurance fund.
State credit – a special form of credit relations between the state and individuals and legal entities, where the state acts as a borrower of funds.
The state attracts additional resources by selling bonds, treasury bills and other types of government securities on the financial market.
Mobilized temporarily free funds of the population and legal entities are used to finance economic and social programs, i.e. state credit is a means of increasing the financial capabilities of the state.
Insurance fund provides compensation for possible losses from natural disasters and accidents, and also contributes to their prevention.
Currently, along with state insurance organizations, insurance is carried out by joint-stock insurance companies that have received licenses to conduct insurance operations.
In terms of industry, insurance is divided into personal insurance, property insurance, and liability insurance. With the transition to market economic conditions, another branch of insurance appeared - business risk insurance (voluntary and compulsory).
Stock market - This is a special type of financial relationship that arose as a result of the purchase and sale of specific financial assets - securities.
The task of the stock market is to ensure the process of capital flow into industries with a higher level of income. Stock market participants expect to receive higher returns compared to investing money in a bank.
Finance of enterprises of various forms of ownership are the basis of the country's unified financial system. They serve the process of creation and distribution of the social product and national income and are the main factor in the formation of centralized monetary funds.
10. Describe the financial relations of the organization
Financial relations - arising in the process of formation and use of special-purpose funds necessary to solve the problems of socio-economic development at different levels and stages of this process.
Financial relations arise at a certain stage of social relations, one of four: production, distribution, exchange, consumption.
The relationship between production and consumption is directly related to the circulation of real money in the production of goods and the provision of services. But they enter into consumption as a result of relations of distribution of new value through the formation of different funds of money, after which the turn of exchange relations begins.
Consequently, only at the stage of distribution relations do financial relations arise.
Financial relations have a number of features that distinguish them from other types of economic relations:
1. financial relations are of a monetary nature; they are based on money. These relations are regulated by legal methods using the rules of financial law. Not all monetary relationships are financial. Money is a prerequisite for the existence of finance.
2. financial relations are distributive in nature; they arise at the stage of the reproduction process, at which new value in the form of profits of economic entities and the state's GDP is distributed among funds of funds that have a designated purpose. It is assumed that each subject of financial relations should receive their share.
3. financial relations provide the subjects of these relations with the formation of income and savings in the form of financial resources. Financial resources are the material carriers of financial relations.
4. one of the parties to financial relations is always the state represented by legislative authorities and executive authorities.
5. only the state can dictate the rules and conditions of financial relations. For all legal entities (regardless of their form of ownership and organizational and legal forms), individuals and their families, the regulations (instructions) of the state are binding.
11. Types and forms of state financial control
State financial control in the Russian Federation should be considered as the activities of state bodies and local self-government bodies regulated by legal norms to control the formation, distribution, targeted and effective expenditure of financial resources, as well as the legality and rationality of the use of state and municipal property, with the goal of not only detecting, but also preventing violations in operation of controlled objects.
The forms and procedure for exercising financial control by executive authorities and local self-government bodies are established by the Budget Code of the Russian Federation, other regulatory legal acts of the Russian Federation, and constituent entities of the Russian Federation. and local governments.
Types of financial control
State financial control- this is control exercised by public authorities in accordance with legislatively vested powers.
Municipal financial control- this is control carried out by the control bodies of municipalities.
Departmental financial control- this is control carried out by the control and audit units of ministries and departments within their field of activity.
On-farm financial control- this is control exercised by financial and economic services of economic entities. The object of control in this case is the financial activity of an economic entity.
Independent financial control- this is the control carried out by auditing activities. The main purpose of auditing activities is to establish the reliability of the accounting (financial) statements of business entities and the compliance of the financial and business transactions performed by them with the legislative and regulatory acts in force.
Forms of financial control
Preliminary financial control carried out at the stage of drawing up, reviewing and approving draft budgets; estimates of income and expenses, financial plans of institutions, organizations, etc.
Current financial control carried out in the process of executing the budget schedule, in the course of fulfilling the limits of budget obligations, estimated financial assignments, and compliance of the direction of expenses with planned assignments.
Subsequent financial control carried out after the end of the reporting period and the financial year as a whole.
Audit is a system of mandatory control actions for documentary and factual verification of the legality, expediency and effectiveness of business and financial transactions carried out during the audited period, as well as the legality and validity of the actions of officials in their implementation.
Examination represents a single control action or study of the state of affairs in a certain area of \u200b\u200bthe activity of the person being inspected.
Survey– this is the familiarization of regulatory authorities with the state of a certain area or issue of the financial and economic activity of the inspected economic entity.
Analysis is a type of financial control that involves detailed study of documentation for the purpose of an overall assessment of effectiveness and efficiency.
In the Russian Federation, at the federal level, state financial control bodies are represented by the Accounts Chamber of the Russian Federation, the Ministry of Finance of the Russian Federation, the Ministry of Taxes and Duties of the Russian Federation, the Central Bank of the Russian Federation, the State Customs Committee of the Russian Federation, as well as control and audit services federal executive authorities and other bodies exercising control over the receipt and expenditure of federal budget funds.
12. Factors influencing the organization of enterprise finance
The organization of finances of business entities is influenced by:
The organizational and legal form of activity (determined by the Civil Code) determines the content of financial relations in the process of creating authorized capital (Articles 83,90,73,99 of the Civil Code of the Russian Federation). The property of state and municipal enterprises is formed on the basis of state and municipal property. Financial relations between the founders are built depending on the organizational and legal form of activity of the business entity,
Industry technical and economic features. Industry specifics affect the composition and structure of production assets, the duration of the production cycle, features of the circulation of funds, sources of financing for simple and expanded reproduction, the composition and structure of financial resources, the formation of financial reserves and other similar funds,
Industry features affecting the organization of enterprise finances:
Differences in technology and the nature of labor in different industries, affecting the composition and structure of production assets, the level of material and technical equipment of production, the types and structure of working capital, the level and qualifications of workers, etc.
Different duration of the production cycle and different nature of the increase in costs during the production process; these differences are reflected in the size, structure and sources of working capital, relationships with banks and partners, the procedure and timing of fulfillment of financial obligations to the budget, the composition of financial benefits,
Dependence of production on natural and climatic conditions affecting the quality and quantity of products, the level of costs for its production, financial results of enterprises, etc.
The dependence of economic business conditions on the possibility of obtaining rental income, the presence of which creates the need for a special mechanism of financial regulation, which can be achieved through the use of tax levers,
Differences in the economic conditions of management of industrial infrastructure industries, which affects the sources of formation of financial resources, forms of their use, relationships with the budget and extra-budgetary funds, etc.
Only full consideration of all industry technical and economic features characteristic of the corresponding type of production activity will make it possible to create a financial mechanism that takes into account to the greatest extent the needs of production, the needs of the manufacturer and consumer of the product.
Budget classification
Budget classification of the Russian Federation is a grouping of income and expenses of budgets at all levels of the budget system of the Russian Federation, as well as sources of financing the deficits of these budgets, used for the preparation and execution of budgets and ensuring comparability of budget indicators at all levels of the country's budget system. The classification of budget revenues of the Russian Federation is a grouping of budget revenues at all levels of the budget system; it is based on legislative acts that determine the sources of revenue generation for budgets at all levels of the budget system.
Income groups consist of items that combine specific types of income by sources and methods of obtaining them.
Functional classification expenditures of budgets of the Russian Federation - grouping of expenditures of budgets of all levels of the budget system of the Russian Federation. reflects the direction of budget funds to perform the main functions of the state, including financing the implementation of regulatory legal acts adopted by state authorities and state authorities of the subjects, to finance the implementation of certain state powers transferred to other levels of government.
Interbudgetary relations
Interbudgetary relations– these are the relations between the authorities of the Russian Federation, constituent entities of the Russian Federation and local self-government. They are built on the following principles:
Balancing the interests of all participants in interbudgetary relations,
Independence of budgets at all levels,
Legislative delimitation of spending powers and revenue sources between budgets of all levels,
Objective redistribution of funds between budgets to equalize the level of budgetary provision of regions and municipalities,
Unity of the budget system,
Equality of all budgets of the Russian Federation
Interbudgetary relations are regulated. Budget regulation is the process of distributing income and redistributing funds between budgets of different levels in order to equalize the revenue side of budgets, carried out taking into account state minimum social standards.
One of the methods of budget regulation is the provision of direct financial assistance from a higher budget to a lower one. Forms of providing direct financial support: subventions, subsidies, subsidies, credits, loans.
In 1994, a new mechanism of interbudgetary relations was introduced in Russia. The Federal Fund for Support of Regions (FFSR) was created through deductions of part of the VAT going to the federal budget. The regions receive transfers from this fund (transfer of funds to the budgets of lower territorial levels from the regional support fund).
Insurance functions
1. risk – ensures the redistribution of monetary value between insurance participants upon the occurrence of insurance events.
2. precautionary – involves the timely conclusion of an insurance contract and the transfer of insurance premiums in order to ensure financing of activities related to reducing the insurance risk.
3. The savings fund is designed to ensure the targeted formation and use of insurance fund funds.
Insurance relations arise when an insurance contract is concluded between the insurer and the policyholder.
Insurer – this is a legal entity (state insurance companies, joint-stock insurance companies, mutual insurance and reinsurance companies) that has the right to carry out insurance activities.
Policyholder - This is a legal or natural person who has an insurance relationship with the insurer on the basis of a contract concluded on a voluntary basis or by force of law.
Insurance intermediaries:
1. insurance agents – individuals and legal entities acting on behalf of and on behalf of the insurer in accordance with the powers granted.
2. insurance brokers - legal entities and individuals registered in the prescribed manner as entrepreneurs and carrying out independent intermediary insurance activities on their own behalf and representing the interests of either the insurer or the policyholder.
Insurance classification
1. by form:
mandatory;
voluntary.
2. by insurance objects:
personal insurance (life and health of citizens);
property insurance (inventory and property interests of the policyholder, transport insurance, housing);
liability insurance (civil liability insurance for vehicle owners);
Money circulation is the continuous movement of money in cash and non-cash form, during which money performs the functions of circulation and payment
Currently, the theory identifies the following types of money, ranging from the earliest to those existing today.
Metal (full or real) money;
Paper money (signs of value, representatives of full-fledged money);
Credit money (signs of value, substitutes for real money).
Metallic money is real money, i.e. money whose nominal value corresponds to the real value or value of the metal from which they are made.
Metal money (copper, silver, gold) made it possible to move from a commodity-accountable universal equivalent to a commodity-weight equivalent.
The ethnographer Bastian, who visited Burma at the beginning of the 19th century, testified that when people in Burma went to the market, they stocked up with a piece of silver, a hammer, a chisel, scales and weights. The payment for the goods was silver, the required amount of which was cut off right there on the market.
A later stage in the development of metal monetary circulation was the appearance of coins, which made it possible to move from weight proportions in the exchange of goods and measurement of their value to a metal-minted universal equivalent. A coin is a certain guaranteed amount of metal that has distinctive features established by law. The round shape of the coin turned out to be the most convenient for circulation (less wearable). The front side of the coin is called the obverse, the back side is called the reverse, and the edge is called the edge. In order to prevent the coin from being damaged, the edge was cut.
In most countries, gold became real money. The reason for this was the properties of this metal, making it most suitable for performing the functions of money:
Rarity;
Portability (high concentration of cost);
Uniformity in quality;
Divisibility and connectivity without loss of value;
Storability (high degree of resistance to external physical and chemical influences).
It should be noted that not all metal money is full-fledged. Thus, signs of value are a worn-out coin made of precious metal, a billon coin, i.e. a small coin made of cheap metals (copper, aluminum).
Paper money is signs, representatives of full-fledged money, their quantity in circulation is determined by the value of the state's gold reserves. Historically, paper money arose from metal circulation and appeared in circulation as substitutes for silver and gold coins that were previously in circulation, based on the following premises:
1) due to objective necessity:
Gold mining did not keep pace with the production of goods and did not meet the full need for money;
Highly portable gold money could not serve the low-value turnover;
Gold circulation did not have economic elasticity (the ability to quickly expand and contract).
2) from the peculiarities of the functioning of money as a means of circulation. The emergence of paper money occurs in three stages.
Stage 1 - erasing coins, as a result of which a full-fledged coin turns into a token of value;
Stage 2 - deliberate damage by the state to metal coins, i.e.
A deliberate reduction in the content of precious metals in a coin in order to generate additional income for the treasury (History knows many examples of damage to coins. For example, the French king Philip IV the Fair received another nickname - a counterfeiter. In Russia from the 12th to the 18th century, the silver content in ruble decreased from 48 spools to 4 spools 21 shares.);
Stage 3 - the government issues paper money with a forced exchange rate.
The first paper money appeared in China during the reign of the Tang Dynasty (618-907). It is known that in 751 this money went out of circulation due to depreciation after the defeat in the war with the Tibetans. In Persia, paper money was issued in 1294, Japan - 1337, France - 1571, USA - 1690, Russia - 1769. under Catherine II.
The peculiarity of paper money is that, being deprived of independent value, they are provided with a forced exchange rate by the state, and therefore acquire a representative value in circulation and serve as a means of purchase and payment.
Issuers of paper money are either the government treasury or central banks. The difference between the nominal value of issued paper money and the cost of its issue forms the share premium, which is an essential element of government revenue. Paper money represents the emission universal equivalent.
The economic nature of paper money is such that it excludes the possibility of stable circulation, since the issue of money is not regulated by the needs of commodity circulation in money, and there is no mechanism for automatically withdrawing excess paper money from circulation. Since the issue of paper money is carried out by the state, it is its needs for money to cover its own expenses that determine the size of the issue of paper money. Therefore, the most typical inflationary depreciation of paper money is caused by their excessive emission.
Credit money arises with the development of commodity production. Their appearance is associated with the function of money as a means of payment, where money acts as an obligation that must be repaid on time. Credit money is a representative of money capital; it does not appear from circulation, but from production, from the circulation of capital. Unlike the functioning of paper money, the amount of credit money in circulation is determined not by the real gold and foreign exchange reserves of the state, but by loans. Credit money is issued both by private legal entities and by the state represented by the central bank.
Credit money has gone through the following development path: bill of exchange - accepted bill of exchange - banknote - check - electronic money - plastic cards.
A bill of exchange is the first type of credit money that arose as a result of trade on credit. A bill of exchange is a document drawn up in the form established by law and containing an unconditional abstract (without regard to the type of transaction) written promissory note.
Types of bills:
Commercial, arising on the basis of a trade transaction.
Types of commercial bill:
A simple (solo bill) is a written promissory note of the debtor to pay within a specified period of time a certain amount of money to the owner of the bill;
A transfer (draft) is an order from the creditor (drawer) to the debtor (drawee) to pay a certain amount to the required third party (remitee) within a specified period. That. the drawer transfers his debt to a third party to the drawee;
Financial, arising from the lending of a certain amount of money (a type of treasury bill is a treasury bill, where the debtor is the state);
Friendly - non-cash bills not related to any specific transaction, but issued by counterparties to each other for the purpose of receiving funds by accounting with commercial banks;
Bronze - bills that do not have real security.
An accepted bill is a bill guaranteed for payment by a third party (most often a bank).
The banknote is the dominant form of credit money, currently issued by the central bank and having credit collateral (bills, government securities). Banknotes are perpetual debt obligations of the state and, thanks to their state guarantee, become a generally accepted universal equivalent.
The issue of banknotes has 3 support channels:
Bank lending to the economy (banknotes are issued against promissory notes);
Bank lending to the state (banknotes are issued against state debt obligations);
Gold and foreign exchange reserves (banknotes are issued against the increase in gold and currency reserves in the central bank).
Having the same nature as a bill of exchange, a banknote differs significantly from it in the following ways:
Urgency (the bill is a fixed-term debt obligation, the banknote is indefinite);
Guarantee (a bill is guaranteed by an individual, a banknote by the state);
When considering a banknote as a form of credit money, it is essential to consider the differences between a banknote and paper money. In the analysis, we will use the concept of a classic banknote - the first form of a banknote that has double security (a commercial guarantee based on bill accounting and a gold guarantee that ensures its exchange for gold):
By origin, paper money arose from the function of money as a means of circulation, a banknote from the function of being a means of payment;
According to the method of issue, paper money is issued by the treasury, banknotes are issued by the central bank.
By repayment - after the expiration of the term, the bills under which the banknotes were issued are returned to the bank, paper money remains in circulation;
According to the exchangeability - the banknote was exchanged for gold and silver, paper money was always not exchangeable.
In modern conditions, the banknote is not redeemable for gold, which makes it similar to paper money.
A check is a monetary document of the established form containing an unconditional order from the account holder at a credit institution to pay the holder of the check the amount specified in it. Checks first appeared in England in 1683.
There are 3 main types of checks:
Personal - to a specific person without the right of transfer;
Bearer - without specifying the recipient;
Order - to a specific person, but with the right to transfer by means of an endorsement (endorsement) on the back of the document.
Electronic money arose as a result of mechanization and automation of banking operations and the transition to the use of computers. The introduction of computers made it possible to move from paper-based information in the monetary sector to electronic databases and payments through making electronic records. The cash payment took the form of an electronic impulse. Electronic money is not a new type or variety of money, since it is based on the usual deposit circulation, based on the initial deposit of a certain amount of credit money by the person making the payment.
The reasons for the transition to electronic money were:
Savings on distribution costs;
Acceleration of calculations;
Increasing the level of banking services.
Plastic cards are a personalized monetary document that certifies the existence of its owner’s account with a credit institution and gives the right to purchase goods and services in retail trade without paying in cash. A plastic card is an electronic alternative to cash and checks. Plastic cards are characterized by a wide variety of
More on topic 18. The concept of money circulation. Types of money functioning in monetary circulation:
- 5.1. The concept of “cash turnover”, its content and structure
- Topic 1.5. Measuring the money supply. Money circulation and its laws
- CHAPTER V. FUNCTION OF THE MEANS OF PAYMENT. CREDIT BALANCE OF MONEY CIRCULATION. CREDIT MONEY.
- Functions of money in the system of economic relations. The function of money as a measure of value, circulation, a means of accumulation and savings, a means of payment. Function of world money
- Monetary system. Types of monetary systems The concept of a monetary system and its types
- Copyright - Advocacy - Administrative law - Administrative process - Antimonopoly and competition law - Arbitration (economic) process - Audit - Banking system - Banking law - Business - Accounting - Property law - State law and administration - Civil law and process - Monetary law circulation, finance and credit - Money - Diplomatic and consular law - Contract law -
Money circulation and its basic categories.
Money circulation is the movement of money when they perform their functions in cash and non-cash forms, serving the sale of goods, as well as non-commodity payments and settlements in the economy.
Money circulation is carried out in cash and non-cash forms.
Cash circulation- the movement of cash in the sphere of circulation and the performance of 2 functions by it: a means of payment and a means of circulation. Cash is used: to pay for goods, works, services; for settlements not related to the movement of goods and services (settlements for the payment of wages, bonuses, benefits, scholarships, pensions, for the payment of insurance compensation under insurance contracts, for payment for securities and the payment of income on them, for payments to the population, for economic needs , for business trips, for entertainment expenses, for the purchase of agricultural products, etc.). Cash flow is carried out using various types of money: banknotes, metal coins, other credit instruments (bills, checks, credit cards). In Russia, attempts are being made to limit cash circulation, because it allows you to escape state control over the activities of legal entities and individuals.
Cashless circulation- movement of value without the participation of cash. The share of non-cash payments in Russia is 75%. In countries with developed economies, this figure is 90-93%. The high level of non-cash payments in any country indicates the correct, competent organization of all monetary turnover.
There is a close relationship between cash and non-cash circulation: money constantly moves from one sphere of circulation to another, they form a general money circulation in which a single money operates.
Depending on the economic content, two groups of non-cash circulation are distinguished: on commodity transactions, i.e. non-cash payments for goods and services; on financial obligations, i.e. payments to the budget and extra-budgetary funds, repayment of bank loans, payment of interest on loans, settlements with insurance companies. The importance of non-cash payments is that they speed up the turnover of funds, reduce the absolute amount of cash in circulation, and reduce the costs of printing and delivering cash.
Non-cash turnover in Russia is characterized by the mandatory opening of a current or settlement account with a bank; payments are made with the consent of the buyer or on behalf of the payer; the basis for the transfer of funds are financial payment documents (payment orders, settlement checks, contracts); if the terms of the agreement are violated, there is a possibility of complete or partial refusal of payment in accordance with the “Rules for non-cash payments”; cash in the cash register of the enterprise is within the established limits.
In Russia, in accordance with the rules of the Bank of Russia, it is determined that payments by enterprises for their obligations, as well as between legal entities and individuals for inventory items, are made non-cash through bank institutions.
Money turnover- the movement of money in the process of performing its functions as a means of circulation and a means of payment. Money circulation is carried out in cash and non-cash forms.
Cash circulation- movement of cash in the sphere of circulation. Cash is used to pay for goods, work, services, wages, bonuses, benefits, scholarships, pensions, travel expenses, etc. Cash circulation is carried out using banknotes and metal coins.
Cashless circulation- movement of value without the participation of cash. According to the economic content, two groups of non-cash circulation are distinguished: for commodity transactions, i.e. non-cash payments for goods and services; on financial obligations, i.e. payments to the budget and extra-budgetary funds, repayment of bank loans, payment of interest on loans, settlements with insurance companies.
Settlement document- this is an order issued on paper or electronically by the payer (client) to write off funds from his account and transfer them to the account of the recipient of funds or an order of the recipient of funds (collector) to write off funds from the payer’s account and transfer them to the account specified by the recipient funds (by the claimant). When making non-cash payments, the following are used: settlement documents: money orders; letters of credit; checks; payment requirements; collection orders.
Payment order- an order of the account owner (payer) to the bank servicing him, documented in a settlement document, to transfer a certain amount of money to the recipient’s account opened in this or another bank. The procedure for calculating payment orders is shown in Fig. 4.1.
Rice. 4.1. Procedure for settlements by payment orders
Letter of Credit- a conditional monetary obligation accepted by the bank on behalf of the payer to make payments in favor of the recipient of funds upon presentation by the latter of documents that comply with the terms of the letter of credit, or to authorize another executing bank to make such payments. A letter of credit is intended for settlements with one recipient of funds.
Banks can open the following types of letters of credit: covered (deposited) and uncovered (guaranteed); revocable and irrevocable (can be confirmed).
Check- a security containing an unconditional order from the drawer to the bank to pay the amount specified in it to the check holder. The check settlement procedure involves the drawer, check holder, and payer. The drawer is a legal entity that has funds in the bank, which it has the right to dispose of by issuing checks. Check holder is a legal entity in whose favor the check is issued. Payer - the bank in which the drawer's funds are located. The procedure and conditions for using checks in payment transactions are regulated by the Civil Code of the Russian Federation.
Payment request- a settlement document containing the claim of the creditor (recipient of funds) under the main agreement to the debtor (payer) for the payment of a certain amount of money through the bank.
Payments for collection represent a banking operation through which the bank, on behalf and at the expense of the client, on the basis of settlement documents, carries out actions to receive payment from the payer.
The movement of money when they perform their functions in cash or non-cash form is called money circulation.
Cash circulation- this is the movement of cash in the sphere of circulation and its performance as a means of circulation. Cash is used for circulation of goods, services, for payment of wages, benefits, pensions, etc.
Cashless circulation– this is a movement without the participation of cash, i.e. transfer of funds to the accounts of credit institutions.
Non-cash cash turnover covers payments between:
1. enterprises of various forms of ownership that have accounts with credit institutions;
2. legal entities and credit institutions regarding loan repayment;
3. legal entities and the population for the payment of wages and income through the Central Bank.
Depending on the economic content, two groups of non-cash payments are distinguished:
1. for commodity transactions (non-cash payments for goods and services);
2. for financial obligations (payments to the budget, extra-budgetary funds, repayment of bank loans, payment of interest on a loan, settlements with insurance organizations).
There is an interconnection and interdependence between the forms of circulation of money; they form a common money turnover countries in which a single currency operates.
Classification of settlement documents for non-cash expenses:
Changing the form of value (product to money, money to product), money is in constant movement between three subjects: 1) individuals; 2) business entities; 3) government bodies. The movement of money when they perform their functions in cash and non-cash form is money circulation.
The social division of labor and the development of commodity production are the objective basis of money circulation. The formation of national and world markets under capitalism gave a new impetus to the further expansion of money circulation.
The country's cash turnover is equal to the sum of all payments made by three entities in cash and non-cash forms for a certain period. Money serves the exchange of value of GDP and income, including the circulation of capital, the circulation of goods and the provision of services, the movement of loan and fictitious capital and various social groups.
The beginning of the movement of money is preceded by its concentration among subjects (in the wallets of the population, cash registers of legal entities, in the accounts of credit organizations, in the state treasury) and the emergence of a necessary need for them in money.
Money turnover- this is the movement of money when they perform their functions in cash and non-cash forms, serving the sale of goods, as well as non-commodity payments and settlements in the economy. The objective basis of monetary circulation is commodity production, in which the commodity world is divided into goods and money, giving rise to contradictions between them. With the deepening of the social division of labor and the formation of national and world markets under capitalism, money circulation receives further development. It serves the circulation and circulation of capital, mediates the circulation and exchange of the entire total social product, including the income of various classes. With the help of money in cash and non-cash forms, the process of circulation of goods, as well as the movement of loan and fictitious capital, is carried out.
The country's monetary turnover, reflecting the movement of money, is the sum of all payments made by enterprises, organizations and the population in cash and non-cash forms over a certain period of time.
Money circulation is divided into cash and non-cash.
Cash circulation- This is the movement of cash. The means of circulation and payment in this case are real banknotes transferred by one entity to another for goods, works and services or in other cases provided for by law. It is serviced by banknotes, small change and paper money (treasury notes). In industrialized countries, banknotes issued by the Central Bank make up the vast majority of cash circulation. A small part of the issue of money (about 10%) falls on treasuries, which mainly imitate coins and small denomination paper notes - treasury notes.
Cash turnover of the country- this is a part of cash turnover equal to the sum of all payments made in cash over a certain period of time. This turnover is mainly associated with the receipt of cash income of the population and its expenditure.
Cash turnover, which represents a set of payments for a certain period of time, reflects the movement of cash both as a means of circulation and as a means of payment.
The scope of use of cash is mainly related to the income and expenses of the population:
· settlements between the population and retail and public catering enterprises;
· remuneration of labor by enterprises and organizations, payment of other monetary income;
· depositing people's money into deposits and receiving deposits;
· payment of pensions and scholarships, insurance compensations under insurance contracts;
· issuance of consumer loans by credit institutions;
· payment for securities and payment of income on them;
· payments by the population for housing and utilities, when subscribing to periodicals;
· payment of taxes to the budget by the population, etc.
Cash turnover between enterprises is insignificant, since the bulk of payments are made non-cash.
Different procedures for settlements with the participation of citizens have been established depending on the connection of these payments with their business activities. With the participation of citizens who are not engaged in entrepreneurial activities, it is allowed to make cash payments without limiting the amounts in and non-cash form. However, payments to citizens related to business activities must, as a rule, be made by bank transfer.
Cashless circulation is a change in cash balances in bank accounts that occurs as a result of the bank’s execution of the account owner’s orders in the form of checks, orders of approval, plastic cards, electronic means of payment and other payment documents.
There are two types of non-cash circulation: by commodity transactions And financial obligations. The first group includes non-cash payments for goods and services, the second includes payments to the budget (income tax, value added tax, personal income tax and other mandatory payments) and extra-budgetary funds, repayment of bank loans, payment of interest on loans, settlements with insurance companies.
There is a close relationship between cash circulation and non-cash circulation: money constantly moves from one sphere of circulation to another. The receipt of non-cash funds into bank accounts is an indispensable condition for the issuance of cash. Therefore, non-cash circulation is inseparable from the circulation of cash and together with it forms a single monetary circulation of the country, in which a single money of the same name circulates.
Non-cash turnover– this is the amount of payments for a certain period of time made without the use of cash by transferring funds to customer accounts in credit institutions or mutual settlements. This turnover constitutes a significant part of the country's cash flow.
Non-cash cash flow is expressed in non-cash payments. Non-cash payments are of great economic importance in accelerating the turnover of funds, reducing cash in circulation, and reducing distribution costs.
Settlement operations are among the most important banking operations. They include collection, transfer and letter of credit operations.
Collection- an operation for banks to receive money for clients on their instructions and at their expense under various documents. Checks, bills, securities, etc. are accepted for collection.
There are two types of collection operations. Simple collection- a transaction in which the bank undertakes to receive money from a third party on the basis of a payment request that is not accompanied by commercial documents and is issued by clients through the bank. Simple collection is used for non-trade payments. Documentary collection- an operation as a result of which the bank must present to a third party the documents received from the client (usually documents of title) and issue them to him only against payment in cash or against acceptance.
At transfer operations the client instructs his bank to transfer a certain amount from his account to a specified recipient. The bank charges a commission for this operation.
Letter of Credit– a written order from one credit institution to another to pay a certain amount to an individual or legal entity upon fulfillment of the conditions specified in the letter of credit.
The main types of letters of credit are cash and documentary. Cash letter of credit– a personal monetary document containing an instruction to the correspondent bank to pay its holder the amount specified in the letter of credit in full or in parts within a certain period. Documentary letter of credit- an agreement under which the issuing bank must, at the request and on the basis of instructions from the client, make a payment to a third party or on his order, pay or accept bills of exchange issued by him, buy or discount documents. The issuing bank may give the authority to perform any of the specified operations to another bank (executing).
