MONEY | |
Accept v – to agree to receive, or to take, something offered – приймати, погоджуватись. To accept in payment for something – приймати в сплату за щось.
Assets n – property and possessions that can be accepted in settlement of the debt – майно, засоби. Syn. property, possessions.
Cash n – money in the form of coins and banknotes – готівка; монети та паперові гроші.
Currency n – money that is actually in use in a particular country – гроші; валюта. Syn. money.
Denomination n – class or unit based on quantity, value, or measure – вартість, номінал; купюра. Small/large denomination – банкнота/купюра малої/великої вартості; denomination of money – грошова ...view middle of the document...
Before getting a formal definition of money it is important to start with the key idea: money is anything that is generally accepted in payment for goods and services, and debts and makes the trading process simpler and more efficient.
At different periods of time and in different parts of the world a variety of commodities served as money. These commodities were: cattle, sheep, furs, leather, fish, tobacco, tea, salt, etc. The economists consider that to serve effectively as money, a commodity should be rather durable, easily divisible, and portable. None of the above-mentioned commodities possessed all these qualities, and in time they were replaced by precious metals.
Under a monetary system, money is exchanged for goods or services when people want to buy things; goods or services are swapped for money when people sell things.
Nowadays the money people are most familiar with is currency that people use almost daily. Currency is legal tender. This means the law requires that it must be accepted in settlement of debts. Currency refers to all coins and paper money issued by the central bank of a nation and held by the public within a country. It also includes cash in the vaults of commercial and savings banks and currency carried abroad by travelers.
Although anything can serve as money, modern money should have the following characteristics:
➢ Stability. The value of money should be more or less the same today as tomorrow. In societies where the value of money fluctuates people will store it in the hope its value will increase, or spend it immediately thinking it will be worth less tomorrow.
➢ Portability. Modern money has to be small enough and light enough for people to carry. It especially relates to checkbooks. Check can be written in almost any amount.
➢ Durability. Money has to have a reasonable life expectancy. So, durability means that modern money is made of a very high quality material that makes it possible to be in circulation over a long period of time.
➢ Uniformity. Equal denominations of money should have the same value.
➢ Divisibility. One of the principal advantages of money is its ability to be divided into parts. In other words, it is easy to make change for a large denomination.
➢ Recognizability. Money should be easily recognized for what it is and hard to copy.
Since money is best defined in terms of what it does, the economists describe money in terms of its three basic functions - the needs it fulfills in every society. Money serves these functions regardless of its name or form – U.S. dollar, Japanese yen, Ukrainian hryvna.
✓ The most important and the most easily understood function of money is to serve as a medium of exchange. When money is used as a medium of exchange, it distinguishes from other assets. Money enables exchanges to be made easily. In a money economy people can sell what they have to anyone and use the money to buy what they want.
✓ When performing a function of a measure of...