Money is defined as money, whether in the form of metal or paper pieces, or something similar to securities such as bonds, and it includes money, real estate, commercial materials, cars, furniture, and other properties that are classified within the money, and money is defined as money, whether in the form of metal or paper pieces, or something similar to securities such as bonds.
According to the designation of the governments of countries, money is the official and legal thing that consists of banknotes, currencies, and instruments, and is the principal means of financial circulation; every country in the world has its own money.
types of money
There are several different sorts of money:
- Money as a source of security: It's the initial sort of currency, and it's split into two parts:
- Money that cannot be moved or transferred from one location to another is referred to as fixed money. If this money symbolizes real estate, it must be sold unless the original image has been modified. Buildings and land are examples of permanent money that can be converted into banknotes that can be moved and taken from one location to another.
- Movable money: It is money that accepts transfer and remains in its original form no matter how much it is moved or changed in place. Examples include metal coins and gold jewelry.
- Money in terms of dealing: It is the second type of money, and it is divided into two parts:
- Murali money: It is money for which there is a similarity in the market, and the value of its units does not vary, and traders are not monopolized by it, and it depends on the use of measures of weight, such as counts, weights, and weights, and examples of which are wheat and barley.
- Valuable money: It is money whose value varies, which leads to merchants monopolizing it, such as real estate.
- Money in terms of security: It is the third type of money and it is divided into two parts:
- Al-Mutaqwam money: It is the money that is legally permissible to use, such as real estate, cars, and land.
- Unrecognized money: it is money that is not legally permissible to use, such as alcoholic beverages; Because it doesn't count as money at all.
- Intermediary of exchange: the role of money in commercial exchange operations; i.e. in buying and selling products and services; Before relying on money, barter was the main process for people to obtain their daily needs, such as exchanging flour with sugar, but at the present time, money has become the main and main medium for commercial exchange; As individuals go to shops and stores and pay money to merchants for their purchases, the merchants have to accept this money as the accepted and main means of commercial exchange.
- Unit of account: is the use of money as the appropriate criterion for measuring the value of goods and services that individuals buy from the markets, for example, if the price of one kilo of wheat equals 5 dinars; In this case, the unit of calculation for the value of wheat is understandable to buyers; Because of their awareness of the nature of the money that contributed to allocating the price of wheat, but if the merchant asks for a kilo of sugar as a price in exchange for a kilo of wheat, then consumers will become confused; Because they did not understand this unit of account because it was previously traded in the market.
- Preservation of value: is the ability of money to maintain its value; That is, the value of money does not change over time, for example, if 100 dinars are kept in a financial safe or a bank account, its value will remain constant for very long months, and it will not be exposed to any changes in its value.
The importance of money
The importance of money in human life emerged as a result of individuals' diverse needs; the more one is obtained, the more the human goal tends to search for another, and these main needs are the need for food, drink, housing, and others, and with the passage of time, the need for money appeared to keep pace with human needs; especially after consumer needs exceeded production capacity, and not only did each individual depend on what he produced, but he also depended on what others produced.
The following points describe the importance of money in the economic sector:
- Because it contributes to widening the reciprocal scope between individuals and states, money is the most convenient way to exchange things.
- Money has a beneficial role in society since it aids in the expansion of private production.
- Money is linked to all aspects and components of the economic system since it helps to provide the right conditions for people to accomplish their unique demands, whether they are required or not.
- Because of swings and changes in purchasing power, money has an impact on the rate of economic growth.
- By relying on his persuasive role, money helps to develop the economic ties that bind individuals.
Reasons for the decline in the value of money
- Profit margins are drastically cut.
- The ability to use one's own energy in production is deteriorating.
- Reducing the exchange rate of a country's currency in exchange for an increase in the issuance of banknotes.
- For business development, there has been a rise in the import rate, a decrease in the export rate, and a lack of reliance on saving.
- The detrimental effects of foreign debt on governments, as well as interest rate hikes.
- The apparent difference between foreign imports and the countries' own internal resources results in a balance of payments deficit.