Money – they are a specific product, which is measured by the value of all other goods and services, and is carried settlement of obligations used as a universal equivalent, and also by their value is retained for future periods. Electronic money – they are for preservation of prepaid monetary value on a technical device that allows its widespread use for making purchases or financial transactions without the need relation to bank accounts.
Money functions:
medium of exchange – everybody is trying to get money and then use them to buy the necessary goods.
a store of value.
means of payment – all debts are expressed in money and be discharged through them. Money is used as an economic measure, the exchange agent, means of payment and store of value.
differentiated to 3 more functions – social function of money, money as a tool for deferred payment, money as a tool for macroeconomic analysis.
Active money – this money involved in the transactions with goods and services. They participate directly in shaping the national income. They are also called money to secure deals and transactions.
Passive money – they serve to facilitate financial transactions. They pass from hand to hand and do not lead directly to accumulation of national income. They are cash transactions,which are not participating in deals and transactions.
Commodity money serve as a unit and are defined as goods, which is expressed by the price of other commodities. They allow to compare different quantities of single products or order to evaluate the global quantities of goods. Through the unit is made cost savings for information and savings plans and decisions.
Commodity money – first for money were used goods which are rare, expensive and unique, then for the money were used goods which are widespread.
Quasi money – they are a set of assets in the form of actively saving – term deposits in banks, deposits in savings banks, treasury bills and other.
Money multiplier – by determining factors of the money supply depending on the monetary base, at the base of which stand cash and deposits are make it possible to determine the money multiplier and measuring its value. It gives information about the quantity of money in circulation.
Speculative search for money – it occurs when the are expected changes in interest level. The expectation of rising interest rate% and drop of the rate of securities leads to speculative search of money passive, and the expectation of lower interest% and increase the rate securities causes a fall in speculative demand for cash.
Money supply – it is associated with detection needs of asking for money and the impacts to their entry money into the economy.
Interest – it is defined as the amount of money which the debtor pays of its lender for use in loan funds. It is seen as a reward for parting with liquidity. It is inextricably linked to the loan.
