The equivalent of the cost of goods and services is ... Money as equivalent

People are so used to money to such a degree thatthey do not even ask themselves what the bills and coins really are. One of the earliest definitions of economics states that the universal equivalent of the value of goods and services is money, but how can one explain this term to those who did not study the economy? After all, money was not always, and not all need to become financiers. To use the tool, it is enough to understand what it is for and how it works.

Barter exchange and its shortcomings

Initially, commodity relations began asusual barter exchange. This way of exchanging material values ​​has its drawbacks, because it is quite difficult to choose such a type of barter, which suits both sides. The simplest example: a fisherman can exchange his catch for game, hunted by a hunter, but only on condition that the hunter really needs fish. If the hunter does not need a fish, but something else that is not offered at the moment for exchange, then both are in a quandary. Or one of the parties does not need the quantity of goods that the initiator of exchange wishes to receive. People needed a tool that facilitated the commodity relationship, and it appeared.

Different nationalities used differentobjects: seashells, pelts of a fur-bearing animal, a certain kind of pebbles, gold nuggets. The best equivalent of the cost of goods and services is a certain thing that can be stored for a sufficiently long time, with a certain value in itself, while allowing the "crushing" of the value of goods. So there was money.

Universal commodity of high liquidity

Money itself is a commodity: they must be produced, or, as in the case of the first primitive substitutes for finance, extracted. And this product has a high degree of liquidity, that is, it is valued almost always, it can be exchanged at any time for other goods or other valuables.

Thus, at the moment the onlythe equivalent of the cost of goods and services is money, but each country has its own financial system and its own kind of finance. The best illustration of the fact that money is a commodity is the exchange rate - the financial units of different countries have different costs relative to each other.

The fair equivalent of the value of goods and services is money

So, we decided that the goods can beexchange for money, that is, sell. Services should be considered as a kind of product. If someone spends their energy and time, and this is in demand by a party willing to pay for other people's efforts, then there is no particular difference between a service and a commodity as a material unit. Buying, selling, as well as paying for other people's efforts eventually come down to an exchange, but money acts as an intermediary value. Thus, trade is the equivalent of an exchange: goods and services are exchanged for other goods and services, but with an intermediate phase, namely, exchange for money, which can then be exchanged for necessary goods.

At the same time inevitably there is such a burninga question like value or price. By and large, the product or service is worth as much as the buyer is willing to pay for it. This parameter can be artificially managed by inflating the value of certain items or services. It turns out that the mutual equivalence of goods or services is determined by their "course" - the value at which they are bought or sold. Hence the concepts of high cost or, conversely, cheapness are taken.

Some financial processes

Despite the fact that we use money as athe equivalent of all kinds of values, even intangible, they remain a commodity and, therefore, have their added value. For example, credit funds, which we receive, paying banks assigned to them a percentage. In fact, this percentage is an added value, because in the end you have to pay for the received goods.

Also, money has to be produced, and this, inturn, also requires money. If the purchasing power of a financial unit is reduced, that is, one conditional bill today can buy fewer goods than yesterday, this process is called inflation. Money becomes cheaper, and for the consumer it is certainly a negative process, although it is quite natural.

The study of money and their opportunities gives a chancesomewhat change the attitude to the so-called wealth - the availability of a large stock of tangible assets in monetary terms. After all, if we know how the tool works, it becomes easier for them to use.