Currency unit

Elements of the monetary system

Modern monetary systems include the following elements (with some features).

Currency unit- a banknote established by law, which serves to measure and express the prices of all goods and services.

National or international currency- name of money in a country or group of countries.

Currency unit- this is accepted in this country money name(dollar, mark, ruble, yen, yuan, baht, tugrik, etc.) or the name of money used in the international monetary system (euro, SDR, etc.). All monetary units are divided into smaller parts: the ruble is equal to 100 kopecks, the dollar or euro is equal to 100 cents.

A monetary unit is a banknote (ruble / 100 kopecks), which is used to measure and express the prices of goods (1 dollar - 100 cents).

Most countries use the decimal division system. Within a particular economic system, it serves as a price scale.

Price Scale- means a measure of expression of value in the implementation or evaluation of any benefits in the monetary units of a given country.

Price scale - it's a way of measuring purchasing power or the value of commodities, in other words, through the scale of prices, the function of money as a measure of value is manifested.

Initially, the weight content of coins coincided with the scale of prices, but gradually it began to separate from the weight content of coins (this was due to damage to coins, their wear, and the transition to minting coins from cheaper metals). With the cessation of the exchange of credit money for gold, the official price scale lost its economic meaning. As a result of the Jamaican Agreement, the official price of gold and the gold content of monetary units were abolished. At present, the scale of prices is formed spontaneously and serves to measure the cost of goods through price.

Currency unit- this is a legally established banknote, which serves to measure and express the prices of all goods and services. It is usually divided into small proportional parts. Most countries have a decimal division system (1 dollar is equal to 100 cents, 1 English pound is equal to 100 pence, etc.).

Price Scale is the choice of the country's currency.

Types of banknotes- this is credit money and, first of all, banknotes, small change, as well as paper money. For example, in the United States, there are banknotes in circulation in 100, 50, 20, 10, 5, 2 and 1 dollars, as well as silver-copper and copper-nickel coins in 1 dollar, 50, 25, 10 and 1 cent.

Emission system- This is a legally established procedure for the issuance and circulation of banknotes. Issuing operations in the states are carried out by:

The Central Bank, which enjoys the monopoly right to issue bank notes (banknote);

Treasury (state executive body), which issues small denominations of paper money (treasury notes and coins made of cheap types of metal).

The modern monetary system of foreign countries is characterized by the following features:

1. the abolition of the gold content of monetary units and the demonetization of gold;
2. the transition to credit money that is not exchangeable for gold, which differs little in nature from paper money;
3. issuance of banknotes into circulation in order to lend to the economy, the state, and also against the growth of official gold and foreign exchange reserves;
4. development of non-cash circulation in money circulation;
5. strengthening state regulation of money circulation.

6. Types of monetary system depending on the type of money.

monetary system - this is. the form of organization of monetary circulation in the country, which has developed historically and is enshrined in national legislation. Monetary systems were formed in the XVI-XVII centuries. with the emergence and establishment of the capitalist mode of production, although some of their elements appeared in an earlier period. As commodity-money relations and the capitalist mode of production develop, significant changes occur in the monetary system.

Type of monetary system depends on the form in which money functions: as a commodity - a universal equivalent or as signs of value. In this regard, the following types of monetary systems are distinguished:

♦ systems of metallic circulation, in which the monetary commodity directly circulates and performs all the functions of money, and credit money is exchanged for metal;

♦ systems of circulation of credit and paper money, in which full-fledged money is ousted from circulation.

Depending on the nature of the exchange of signs of value for gold, there are three types of gold monometallism: the gold coin standard, the gold bullion standard and the gold motto (gold exchange) standard.

The gold-coin standard most corresponded to the requirements of capitalism in the period of free competition, promoted the development of production, the credit system, world trade and the export of capital. This standard is characterized by the following main features;

♦ in the internal circulation of the country there is a full-fledged gold coin, gold performs all the functions of money;

♦ free minting of gold coins for individuals is allowed (usually at the country's mint);

♦ defective money in circulation (banknotes, metal tokens) are freely and unlimitedly exchanged for gold;

♦ free export and import of gold and foreign currency and the operation of free gold markets are allowed.

The functioning of the gold coin standard required the presence of gold reserves in the central issuing banks, which served as a reserve of monetary circulation, ensured the exchange of banknotes for gold, and were a reserve of world money.

As a result of the global economic crisis of 1929-1933. the gold standard was abolished in all countries (for example, in Great Britain - in 1931, in the USA - in 1933, in France - in 1936) and the system of inexchangeable banknote circulation was established.

The most important components of the monetary system are:
1) the national monetary unit in which the prices of goods and services are expressed;
2) a system of credit and paper money, various coins that are legal tender in cash circulation;
3) the system of issuing money, i.e., the legally fixed procedure for issuing money into circulation;
4) state bodies in charge of the regulation of monetary circulation.
Depending on the type of money in circulation, two main types of money circulation systems can be distinguished:
1) systems of circulation of metal money, when full-fledged gold and silver coins are in circulation, which perform all the functions of money, and credit money can be freely exchanged for monetary metal;
2) systems of circulation of credit or paper money, which cannot be exchanged for gold, and gold itself has been forced out of circulation.
Depending on the metal, which in a given country was adopted as a universal equivalent, and the base of monetary circulation, bimetallism and monometallism are distinguished.
Bimetallism is a monetary system in which the role of the universal equivalent is assigned to two precious metals, free minting of coins from both metals and their unlimited circulation are provided.

Issue of cash in circulation is made on the basis of an issuance permit - a document giving the right to support the turnover cash at the expense of reserve funds. In commercial banks, such funds are not created - they have operating cash desks, the maximum balance of money in which is determined in agreement with the Central Bank or its management. Cash services for commercial banks are carried out by cash settlement centers on the basis of agreements.
It should be noted that in our country, until recently, monetary aggregates have not been calculated and used. Theoretically, this was justified by the postulates of Marxist economic science, according to which it is considered unacceptable to combine quasi-money and cash, because completely different categories are mixed - money, securities, credit.

Money - one of the most famous and important attributes of the economy and a complex economic category that performs certain functions. Karl Marx one of the first listed the functions of money:

it is a measure of value and a scale of prices;
it is a medium of exchange;
it is a means of accumulating and forming treasures;
it is a means of payment;
it is world money.

By John Keynes money performs the following three functions:

it is a store of value;
it is a measure of value and means of payment;
it is world money.

Most foreign and a number of domestic researchers call the following functions of money :

it is a means of circulation and payment (Lavrushin divides them into two independent functions);
it is a means of measuring value (measure of value);
it is a means of accumulating and storing value (here, money is a special asset that is stored after the sale of goods and services and provides purchasing power in the future).

As you can see, in each classification there is a cost function of money. Money, being the universal equivalent, can measure price any product on the market. The measure of value - this is an objective function of money that does not depend on the will of an individual individual, which will exist until money is abolished. To perform the function of a measure of value in each economic system installed price scale - a monetary unit used to measure and compare the cost of goods and services.

In the days of the gold coin standard, a certain amount of gold was taken as the standard for prices. When switching to floating exchange rates gold has become an ordinary commodity and the role of price scale is performed directly by money.

Monetary reforms: concept, causes and methods of their implementation

If money ceases to fulfill the function of a measure of value, it becomes necessary to carry out monetary reforms - serious, deep transformations in the monetary system in order to strengthen the national currency, stabilize the monetary unit.

Monetary reforms have taken place in the history of many countries. The main reasons for their implementation are the economic problems of the post-war period, the fight against inflation or the elimination of its consequences. There are other reasons for conducting monetary reforms.

Reasons for monetary reforms :

economic : intensification of inflationary processes (hyperinflation), undermining confidence in the national currency, the use of a parallel currency, the overvaluation of the national currency against foreign ones;
political : change in the political structure of the country, the creation of a new state;
creation supranational currency (e.g. euro).

Methods of carrying out monetary reforms :

devaluation - decrease in the real gold content of money or depreciation of the national currency in relation to hard currencies or international means of payment;
restoration of the old currency - restoration of the exchange of paper money for gold;
nullification of paper money - declaring invalid a number or all payment instruments circulating in the state payment system. (Pavlovian reform of 1991);
denomination - enlargement of the country's monetary unit in order to give it greater weight without changing its name (Russia: 1961 - 10 to 1, 1998 - 1000 to 1).

Monetary reforms of pre-revolutionary and post-revolutionary Russia

In Russia, the first monetary reform was carried out in 1534-1538. Elena Glinskaya, mother of Ivan the Terrible. The reason for its introduction was: the growth of commodity production, the struggle for the concentration of power, the massive counterfeiting of money. The result of the Salo reform was the creation of a unified system of banknotes, which was based on the ruble.

In the 19th century, several monetary reforms were carried out in Russia. .

The reform of Speransky, published in 1810 in the work "Plan of Finance". Then banknotes were declared the debt of the state, secured by all the wealth in the Russian Empire. The basis of the monetary system was to be the silver ruble. But reform plans were only partially implemented.
In 1839, the manifesto of Nicholas Ι established silver monometallism. This reform was carried out by E.F. Kankrin, who used the conclusions and suggestions of M.M. Speransky.
1895 - 1897 - The Vyshnegradsky-Witte reform is one of the most successful reforms in the history of Russia. At that time, the accumulated gold reserves were used for the free exchange of credit notes for gold, for which gold monometallism was introduced by law. As a result of the transformations, by 1913 the ruble became one of the most stable currencies in the world, 2/3 of the world's gold reserves were in Russia. By 1917, it was reduced to zero as a result of Russia's participation in the First World War.

Monetary reforms in Russia in the post-revolutionary period .

1922-1924
First stage(1922) - the exchange of old money for banknotes of the RSFSR sample of 1922. in the proportion of 10,000 to 1 in connection with the creation of a new state and an attempt to reduce inflation;
Second phase(1923) - exchange of banknotes of the 1922 sample for banknotes of the 1923 sample in the proportion of 100 to 1, in addition, a Soviet chervonets was put into circulation - a bank note equivalent to one Zlotnik (7.74 g of pure gold) . By the beginning of the 1930s, the exchange of chervonets for gold had ceased.
This reform created the basis monetary system which lasted until 1991.
1947 - the reform was caused by the need to stabilize the economy of the post-war period. The denomination of banknotes was made in the proportion of 10 to 1, the proportion of the exchange of cash deposits depended on the amount of the deposit.
1961 - (political nature of the reform) - the reform was caused by the fight against the "black market", the need to return the population to the legal market. Prices in state trade were reduced by 10 times, the denomination of banknotes was made in the ratio of 10 to 1, the gold content of the ruble was established.
January 1991 (Pavlovskaya reform) - 50 and 100 ruble banknotes were withdrawn, which were subjected to nullification, 50 and 100 ruble banknotes of a new sample were put into circulation. The exchange of banknotes to the population was carried out in limited amounts and in a short time, which gave the reform a confiscation character.
1992 - as a result of the collapse of the USSR, the entire money supply was divided into Russian and non-Russian. There was no exchange of banknotes, but the separation mechanism had signs of reform.
July 1993 - replacement of banknotes with the symbols of the USSR for banknotes of the Russian state. The reform was of a political nature, was a continuation of the one started a year earlier and solved the problem of creating a monetary unit of the Russian Federation.
from January 1, 1998 - the denomination of the ruble in the proportion of 1000 to 1 during this year and the next two through the bank. The main reason is historical factors, because the reform did not affect the stability of the money supply.

Monetary unit - a legally established monetary unit that serves to measure and express the prices of all goods and services. They also distinguish a national or international monetary unit, that is, the name of money in a country or group of countries.

A monetary unit is the name of money accepted in a given country (dollar, mark, ruble, yen, yuan, baht, tugrik, and others) or the name of money used in the international monetary system (euro, SDR, etc.). The monetary units of any country are divided into smaller parts: the ruble is equal to 100 kopecks, the dollar or euro is equal to 100 cents.

A monetary unit is a banknote (ruble / 100 kopecks), which is used to measure and express the prices of goods (1 dollar - 100 cents).

A significant part of the countries in the world today uses the decimal division system. In the area of a certain economic system, it is the scale of prices.

Price scale.

The scale of prices means a measure of the expression of value in the sale or evaluation of any benefits in the monetary units of a given country.

The scale of prices is a technology for measuring the purchasing power or value of goods, in other words, through the scale of prices, the function of money as a measure of value is manifested.

Initially, the weight of the coins coincided with the scale of prices. But gradually it began to separate from the weight content of the coins. This phenomenon was due to the fact that there was damage to the coins, their wear and tear, the transition to the minting of coins from cheaper metals. At the time when the exchange of credit money for gold took place, the official scale of prices lost its meaning in economic terms. The official price of gold and the gold content of monetary units were abolished as a result of the Jamaica Agreement. Note that in our time, the price scale is used to measure the cost of goods through price and is formed spontaneously.

PRICE SCALE - a way of expressing the value of goods in monetary units. Under the conditions of metallic circulation and the gold standard, M.ts. expresses the amount of money metal corresponding to one monetary unit.

Economics and law: a dictionary-reference book. - M.: University and school. L. P. Kurakov, V. L. Kurakov, A. L. Kurakov. 2004 .

See what "PRICE SCALE" is in other dictionaries:

The amount of gold or silver accepted in a country for a monetary unit and its multiples. Price scale is a means of expressing value in monetary units. See also: Commodity prices Money Financial Dictionary Finam ... Financial vocabulary

Weight quantity (mass) of metal assigned to a monetary unit. After the 2nd World War, by agreement between most industrialized countries, the official price of gold, set by the US Treasury in 1934 (35 ... Big Encyclopedic Dictionary

Method and means of measurement, expression of the value of goods in monetary units. Under the conditions of metal circulation and the gold standard, the scale of prices expresses the amount of metal, silver, gold, corresponding to one monetary unit. Raizberg B.A ... Economic dictionary

English price index; German Preisindex. The weight of gold and silver, accepted in a given country as a specific monetary unit, which serves to measure and express the prices of all goods. Antinazi. Encyclopedia of Sociology, 2009 ... Encyclopedia of Sociology

English scale price A. The amount of gold or silver accepted in the state for a monetary unit and its multiples. B. Expression of value in monetary units. Dictionary of business terms. Akademik.ru. 2001 ... Glossary of business terms

- (English scale of price) a characteristic of the country's monetary system, which determines the purchasing power of a unit of its currency in the domestic market. In the theory of money, a category associated with the function of money as a measure of value. For ... ... Wikipedia

price scale- method and means of measurement, expression of the value of goods in monetary units. Under the conditions of metal circulation and the gold standard, the price scale expresses the amount of metal, silver, gold, corresponding to one monetary unit ... Dictionary of economic terms

PRICE SCALE- (English measure of prices) - technical function of money; a means of expressing value in monetary units. M. c. wears a legal character, depends on the will of the state and serves to express not the value, but the price of the commodity. Through M. c. ideal, mentally ... ... Financial and Credit Encyclopedic Dictionary

PRICE SCALE- - the weight amount of metal, accepted in a given country for a monetary unit and used to measure the prices of goods. To compare the prices of different goods, it is necessary to express their prices in the same units, that is, to reduce them to the same scale. Application ... ... Economics from A to Z: Thematic guide

The weight of a metal (gold or silver) accepted in a given country as a monetary unit and its multiples. Used to measure and express the prices of all goods. Fixed by the state in the legislative order M. of c. not… … Great Soviet Encyclopedia

As a measure of value, money expresses the value of goods (services). They measure the value or social value of commodities, and the prices of commodities receive their monetary expression.
There are two main approaches to the performance of money as a measure of value. The first approach assumes that money has intrinsic value and therefore represents value, the value of other commodities. The function of the measure of the value of full-fledged money is most fully described in K. Marx's Capital. Determining the value of a commodity by comparing it with a certain amount of money is the identification of the same amount of labor that is expended on the production of this commodity and the amount of the commodity that plays the role of money. Therefore, in the theory of K. Marx, money is certainly a commodity, and a special commodity, representing an adequate existence of the exchange value of all goods, or the exchange value of goods as a special isolated commodity is money. In other words, money is the crystallization of the exchange value of all other commodities. This approach was widespread as long as gold and silver money or their “substitutes” (credit money) were actually in circulation, exchanged for metal. When replacing full-fledged money with inferior money, the theory ran into difficulties. It became unclear exactly what intrinsic value money has. Obviously, the cost of producing a 1000-ruble bill (the cost of paper and ink, as well as the labor costs of printing it) is much lower than the cost of goods that can be bought with it.
Attempts to explain the nature of modern credit money, which does not have its own value, ran into difficulties that have not yet been resolved. An opinion was expressed about the representative role of money, i.e. modern money is representatives of gold and replaces it in all functions.
Another approach is based on the fact that money has no intrinsic value, it acts as a kind of common denominator (the so-called money of account), with the help of which the ratio of prices of various goods is expressed. Only commodities have intrinsic value, while money makes it possible to compare and measure their intrinsic value. This approach is now more common.
Accounting money is an attribute of stable commodity-money relations, in which price setting becomes a mental, ideal operation. They are used if the appropriate price scale has developed in society and was later fixed by the power of social traditions and the authority of the state.
This eliminates the need to use real gold. In the event of a change in the proportions between prices for various commodity groups or the implementation of monetary reforms, money continues to perform the function of accounting money.
The value measure function requires its quantitative certainty. Associated with it is the property of money to serve as a scale of prices. When using full-fledged money, the weight content of gold in the monetary unit is legally established and used as a price scale. Prices are linked to the content of gold in the monetary unit. For example, in 1944 the price scale was set on the basis of the official price of gold - 35 dollars per troy ounce (31.1 grams), determined by the Bretton Woods agreement.
With the abolition of the fixed gold content and the transition to defective money, the price scale is set spontaneously in the market and loses its economic meaning.
The scale of prices is a kind of technical element that was formed differently in different national economies. Therefore, the transfer of one national currency to another means, first of all, the transition from one price scale to another. It is not a once and for all given value, its change is possible in the process of inflation and during monetary reforms (denomination).
Money in the function of a measure of value is used to control the measure of labor and consumption through a comparison of planned and actual labor costs (live and embodied). Accounting and evaluation in monetary terms are prerequisites for maintaining statistics, accounting, national accounts. The peculiarity of the function of money as a measure of value is that money is used ideally, as mentally represented money, since the presence of gold or real money is not required to account for labor costs, their control and planning.
Money is used in the pricing process. Price is the monetary expression of the value of a commodity and its usefulness. In Marxist theory, the basis of price is the cost of a commodity, which is determined by the socially necessary costs of its production. According to the concept of utility (the Austrian school in economic theory), price is an exchange proportion that is formed in the course of competition in the market. The theory of price based on the principle of utility actually regards money as a measure of value as money of account, or a unit of account.
In the command-administrative economic system, the price is set artificially on the basis of the cost of production and profitability standards. It was of a normative nature and was mandatory for all sectors of the economy. In addition, prices for individual goods were deliberately either overestimated or underestimated, depending on the goals of socio-economic policy. At the same time, the function of money as a measure of value was violated, and the price ceased to be the basis of rational economic decisions.
Since 1992, in the conditions of price liberalization in Russia, prices have been set on the basis of market relations, they are more in line with real costs. This entailed a change in the ratio between the prices of goods and services, which was “usual” for the Soviet planned distribution economy. In general, money began to perform better as a measure of value.
An important condition for the performance of money as a measure of value is the stability of money. During the period of inflation, the measurement of the value of goods and services in depreciated money becomes difficult1.