The concept of money

in #money7 years ago


The concept of money

Money is all things owned by an individual or group of individuals, including money , real estate, materials business, automotive, furniture, and other properties that are classified within the funds, [1] defines money as money either metal parts or paper , Or similar securities like bonds; where money is used to buy things or to carry out diversified investments. [2] Another definition of money is the formal and legal thing that consists of notes, coins, and instruments. It is the primary means of financial trading according to the definition of state governments. Each country has its own money. [3]

Types of money

The money is divided into a group of species: [4]

  • Money in terms of stability: is the first type of money , divided into two parts:

    ° Fixed money: money that does not accept transfer or transfer from one place to another; unless it changes its original image; in other words, if the money represents a property it must be sold; in order to transfer it to banknotes that can be transferred and carried from one place to another; Examples of fixed money buildings and land.

    ° Money transferred: It is the money that accepts the transfer and remains on the original image, whatever moved or change the place, for example the coins, and gold jewelry.

  • Money in terms of dealing: is the second type of money, divided into two parts:

    ° Homeland money is the money that has a similarity in the market . There is no difference in the value of individuality. Traders do not remember it. It relies on the use of weights, such as the quantities, quantities, and moses, for example, wheat and barley.
    ° Value money: Money is the value of individual values ​​leading to monopoly of traders, such as real estate.

  • Money in terms of warranty: is the third type of money and is divided into two parts: Money is the money that is legally permissible to use, such as real estate, cars and land. Unconsumed money is the money that is not legally permissible to use, such as alcoholic beverages, because it is not money at all.


Money Jobs

The main use of money for all individual consumers is in turn related to the payment of services and goods, but there are many basic functions of money: [5]

  • Medium of Exchange: The role of money in trading: buying and selling products and services. Before accepting money, barter was the basic process for people to get their daily needs, such as sugar substitutes, but at the moment Money has become the primary and main intermediary of trade. People go to shops and shops and pay money to traders for their purchases. Traders have to accept this money as the accepted and main means of trade.

  • Unit of Account: The use of money as the appropriate standard for measuring the value of goods and services purchased by individuals from markets, for example if the price per kilo of wheat is 5 dinars; in this case the unit of calculation of the value of wheat is understood by the buyers; Because of their understanding of the nature of money that contributed to the allocation of the price of wheat, but if the trader requested a kilo of sugar in exchange for a kilo of wheat, then there will be confusion among consumers; because they did not understand this unit of account for not being traded in advance in the market.

  • Save the value ( in English: Store of Value): is the ability of money to maintain its value; ie the value of money does not change over time, for example , if it is retained in the amount of 100 dinars in financial safe or a bank account, it will remain value fixed for a very long months, And will not be subject to any changes in value.

Importance of money 

The importance of money in human life has emerged as a result of the diverse needs of individuals. Whenever one is obtained, the goal of man is to search for others. These main needs are the need for food, drink, housing and others. Especially since consumable needs have become more than productive capacity, and the dependence of each individual on what he or she produces has not only remained, but has become dependent on the consumption of others. This has enhanced the role of money as contributing to the compatibility of the needs of individuals with increased exchange Commercial, and Extend the swap economy , which contributed to the distribution of work, and to support the ownership of means of production and other economic activities. [6]

Summarizes the importance of money in the economic sector according to the following points: [6]

  • Money is the easiest way to exchange goods, because it helps to expand the exchange between individuals and nations.

  • Money plays a productive role in society ; it helps to increase private production in the economy .

  • Money is associated with all parts and components of the economic system, because it contributes to creating the conditions necessary to meet the special needs of individuals, whether necessary or unnecessary.

  • Money affects the rate of economic growth because of fluctuations and changes in purchasing power.

  • Money contributes to the strengthening of economic relations between individuals, by relying on its influential role.


Reasons for the deterioration of the value of money

Suffers money from deterioration in the value; due to the impact factor of inflation within the special economic sectors in many countries, and with a range of reasons why this comes: [6]

  • Profits have fallen very sharply.

  • Deterioration of the ability to exploit special energy in production.

  • Reducing the exchange rate of the currencies of countries, in exchange for the increase in the issuance of banknotes , known as Bankot.

  • High import rate, declining export ratio, and low reliance on savings; for business development.

  • The negative impact of the external debt of countries and the high interest rate.

  • Balance of payments deficit due to the apparent gap between external imports and private domestic resources in countries.

References

1-↑ "Definition and Meaning of Money in the Whole Dictionary of Meanings" , meanings , read it on 14-4-2017. Acting.
2-↑ "money" , Cambridge Dictionary , Retrieved 14-4-2017. Edited.
3-↑ "Money" , Investopedia , Retrieved 14-4-2017. Edited.
4-↑ Salman Maala (2015), Funding and Funding Institutions: Concept, Objectives and Policies (First Edition), Amman - Jordan: Amjad House for Publishing and Distribution, page 21, 22.
5-↑ Brianna Whiting, "The Functions and Characteristics of Money" , Study.com , Retrieved 14-4-2017. Edited.
6-^ A b T. Saleh Abu Farha (2005), change the value of money and its impact on the repayment of the debt in Islam (university research) , Nablus - Palestine: An- Najah National University, p . 13, 14, 46, 47, 48. Adapted.

By Mohamed Faidi

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