Money functions

Money is any object or record, that is generally accepted as 1)___________for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: 2)____________; a unit of account; a store of value; and, occasionally, a standard of deferred payment. Any kind of easily verifiable record serves these functions as well as an object (an "object" that is taken as money actually serves as just a type of secure record), and "3)__________" that exists only as secure records in computerized files, is now the most common form of money.

Money originated as 4)__________, but nearly all contemporary money systems are based on 5)___________. Fiat money is without 6)_________use value as a physical commodity, and derives its value by being declared by a government to be 7)__________; that is, it must be accepted as a form of within the boundaries of the country, for "all 8)_________, public and private".

(commodity money, a medium of exchange, intrinsic, payment, debts, digital money, fiat money, legal tender)

Exercise V. Render in English:

Фиатные деньги

Фиатные (символические, бумажные, декретированные, ненастоящие) деньги – деньги, не имеющие самостоятельной стоимости или она несоразмерна с номиналом. Фиатные деньги имеют ценность и способны выполнять функции денег, поскольку государство принимает их в качестве уплаты налогов, а также объявляет законным платёжным средством на своей территории.

На сегодня основной формой фиатных денег являются банкноты и безналичные деньги, находящиеся на счете в банке. При этом понятие «безналичные деньги» условно, так как речь идет по существу о безналичных (безденежных) расчетах, то есть о расчетах должников с кредиторами без использования наличных денег.

При расчетах наличными деньгами собственник денежных купюр (банкнот) непосредственно использует их по своему усмотрению, а при безналичных расчетах управомоченное лицо предъявляет к банку соответствующие требования, исполнение которых от него уже не зависит. Это же относится к единицам стоимости электронных нефиатных платёжных систем (разновидность электронных денег).

С распространением платежных карт и электронных денег, банкноты постепенно вытесняются из обращения.

Read and translate Text 2

Text 2 Money as Credit

Money does not exist in a pure barter system.  Trades are negotiated by the participants as a fair exchange of goods and services.  If someone agrees to receive equivalent value later in exchange for his goods, he has accepted an IOU.  An IOU is a credit for the seller and a debt for the buyer.  If the IOU becomes negotiable, meaning others will accept it in exchange for goods and services, the IOU is money.  In essence, money is credit that is widely accepted as a medium of exchange. 

The Basic Properties of Money

An IOU will be accepted in exchange for goods and services only if it is seen as a store of value.  However it does not have to store value indefinitely to qualify as money.  It is money if it retains value long enough to be generally accepted as a medium of exchange.  Money is always a store of value, but a store of value is not always money.  For example, a bond is a store of value, but bonds are seldom accepted as a medium of exchange, and therefore are not money.

Most of the money we use is denominated in the unit of account established by the government.That enables us to measure the value of a good or service against another, based on what each sells for in the market.How many quarts of milk are equivalent in value to a barber shop haircut can only be determined in the market place.