Parameter name	Meaning
Article subject:	Factor income
Rubric (thematic category)	Production

4. Interest and dividend.

5. Profit as income from entrepreneurial activity.

1. Essence and classification of income.

The following indicators are used to analyze the economic activity of any firm: total (gross) income TR; average income AR; marginal revenue MR and profit.

Total (gross) income - This is the total income that the company receives from the sale of all products at market prices. It is defined as the product of the market price of products and the number of products sold:

TR= P x Q.

In the Russian economy, total income is revenue, ᴛ.ᴇ. the cost of all products sold, and gross income - the difference between revenue and material costs (costs) for production and sales

products:

TR=P x Q - M3,

where MZ - material costs (the cost of raw materials, materials, fuel, etc.).

Consequently, the concept of ʼʼgross incomeʼʼ includes part of the cost of production - labor costs and profits.

The company operating on market of perfect competition, does not have the ability to influence the price. The price for it is a given value. Therefore, the total income depends only on the volume of production of the firm.

Another phenomenon in market of imperfect competition. Here the firm can influence the price. To sell more products, she is forced to lower the price. Τᴀᴋᴎᴍ ᴏϬᴩᴀᴈᴏᴍ, the gross income of a firm depends on the price and volume of production.

Average AR income - is the income received from the sale of a unit of output. It is defined as the ratio of total income TR to the number of products sold

The average income in terms of size is actually equal to the market price.

Marginal revenue MR - is the increase in sales revenue per additional unit of output. It is defined as the ratio of the increase in total income TR to an increase in production Q.

This is the receipt of additional income from the sale of an additional unit of production. It shows the degree of efficiency of the company.

Taking into account the participation of production factors in the formation of income, factor and disposable incomes are distinguished.

Factor income are primary income. Οʜᴎ are formed from the sale of factors of production (capital, labor, land) and in the process of their use. Factor incomes act in the following forms: as a salary - this is a remuneration for the work of employees; as rent is the provision of premises, equipment, land for rent; as interest, it is the return on capital; how profit is an assessment of the work of an entrepreneur; dividends, etc.

Factor incomes are divided into two groups:

‣‣‣ income based on laborᴛ.ᴇ. labor origin. These are the incomes of workers and employees (wages), entrepreneurs (profit);

‣‣‣ unearned income. These include interest on capital; interest on shares, bonds, current accounts; rent for provided property and land for rent, etc.

Disposable income - these are final (net) incomes or factor incomes after payment of direct taxes, social insurance contributions (pensions, allowances, scholarships, etc.). Οʜᴎ are used by a person or family at their own discretion.

Incomes are subject to distribution among various categories of workers. The well-being of people largely depends on the level of income received. For this reason, a correct, fair distribution of income is very important. Οʜᴎ should be distributed based on the use of factors of production. So, from the use of labor, the employees of the company receive income in the form of wages, from capital, the owners of capital receive a percentage; from the land the owners of the land land rent, etc.

At the same time, these incomes are the prices of factors of production, i.e., these incomes are used to purchase capital, land, labor, etc. As a result, it turns out that the distribution of money income is also carried out through prices for factors of production.

2. Salary and its characteristics.

Wages make up a large part of income and significantly affect the size of people's consumption. The share of wages in GDP in Russia is 23%, and in the US -59%.

In the economic literature, there are various approaches to determining the essence of remuneration for the work of employees (wages) and the factors that determine it at the level of a firm or industry.

A. Smith and D. Ricardo believed that labor is a commodity and has a natural price, which is determined by production costs in the form of the cost of living means (food, clothing, shoes) needed by the worker and his family. The physical minimum of these means of subsistence is determined taking into account historical, cultural and national differences.

The Marxist theory of wages demarcated the concepts work and ʼʼworking stationʼʼ. She proved that wages are the converted form of the value of the commodity ʼʼlaborʼʼ, and not labor. Therefore, labor and labor power are different concepts. Labor - expedient activity of people, it does not exist before the start of production or at the time of the purchase and sale of labor power. It follows that labor is the use of labor power to produce a product. BUT work force - it is a combination of physical and spiritual abilities of a person, or his ability to work. Labor arises when the labor force is combined with the means of production.

Social wage theory M. Tugan-Baranovsky considers wages as the share of the working class in the social product.

In modern economic theory, there is no distinction between labor and labor force, they are identical concepts. Labor is clearly considered a factor of production, and salary - the price of using the worker's labor.

There are nominal and real wages.

Nominal salary - This is the amount of money workers receive from the cash register for their daily, weekly or monthly work. In 2002 ᴦ. the nominal average monthly wage was 4426 rubles, or increased compared to this indicator for 2001 ᴦ. by 35%, and for 1999 ᴦ. 2.9 times. At the same time, it is impossible to judge the level of consumption and the well-being of people by the level of wages. That's what real wages are for.

Real salary - this is nominal wages, minus various taxes and inflation-adjusted payments. It depends on the level of prices for goods and services. Therefore, nominal wages can grow, while real wages can grow at the same time, and vice versa. The cost of living, or the standard of living of the population, depends on real wages. According to the State Statistics Committee, real wages in Russia in 2002 ᴦ. increased against that in 2001 ᴦ. by 16.6%, and compared with the same indicator for 1999 ᴦ. - 1.7 times.

Basic forms wages are time (hourly) and piecework (piece).

Time wage - This is a salary received on the basis of hours worked. There is a daily, weekly, monthly salary. The unit of measurement is price of an hour (labor)- rate per hour.

Working hours 8 hours

The tariff rate is applied when the results of labor cannot be accurately accounted for, but are determined by the performance of duties. This includes the salaries of engineers,

employees, managers, electricians, teachers, doctors, etc. An hourly wage, by UN standards, should not be less than $3; in Russia one can only dream of this. In Japan, the USA, Germany, Sweden, Great Britain and France, the hourly wage in industry is 15-22 dollars.

Time wages allow entrepreneurs to maneuver the length of the working day and the intensity of work, to achieve an actual reduction in wages with an increase in the intensity of work. For this reason, labor laws must be strictly observed.

piece wages - This is earnings that depend on the number of goods and services produced or the amount of work performed. Its unit of measurement is unit price - quotation for products. It is found on the basis of 1 hour of time wages and the amount of production for 1 hour. The use of piecework wages stimulates the growth of productivity and labor intensity, increases competition among workers to maintain jobs, increases wages, as well as unemployment, etc.

Each of the basic forms of wages has its own system, ᴛ.ᴇ. types of wages, which are aimed at stimulating labor productivity, improving the skills of workers and, in general, increasing production efficiency.

With a simple time system wages, wages are determined by multiplying the hourly rate of this category by the amount of time worked.

With time bonus system a bonus for additional results of production (improvement of product quality, quality work, etc.) is added to simple time wages.

Piecework wages have the following systems: direct piecework, piece-bonus, piece-progressive, piecework, individual, collective, etc.

direct piecework salary is determined on the basis of the volume of work performed or products manufactured at the established uniform prices.

piece-rate salary assumes that a bonus for additional results (high quality of the product, savings in raw materials, growth in the quantity of products) is added to direct piecework wages.

Piecework progressive salary is determined on the basis of the volume of production, one part of which, within the limits of the norm, is paid at basic rates, and the other part is paid above the norm at increased prices.

Chord system involves payment for the entire volume of work performed in accordance with the contract. At the same time, the terms are shortened - this is the business of the builders, that is, the workers.

There may be other individual and collective wage systems, where wages are determined on the basis of labor participation (KTU) of members of the labor collective. Οʜᴎ are called upon to link wages with the final results of labor.

The reform of the wage system gives enterprises (firms) the right to choose their own principles for remuneration of employees. For this reason, it is advisable to use the experience of foreign entrepreneurs who widely use the following types of wage system: guaranteeing the minimum wage (tariff rate) even if the employee does not reach the established level of labor productivity; changing wages in the range from minimum to maximum - in proportions depending on the achieved level of labor productivity; systems of worker participation in profits and the creation of workers' property.

In recent years, foreign firms have successfully used various methods to increase employee motivation. systems of worker participation in profits and the creation of workers' property. The participation of employees in profits occurs in the form of deductions in ʼʼfunds of workersʼʼ share of the profit of the current year using a preferential tax regime. The creation of working property is carried out by investing in production on preferential terms of savings from wage deductions.

Factors affecting the size of wages are: productivity and intensity of labor, quality of labor, qualifications of workers, complexity of labor, the economic situation of the country, the level of scientific and technical progress, racial and gender discrimination, etc.

To take into account most of the factors affecting the level of wages, the tariff system is used. It is obligatory for state enterprises and advisory in the conditions of market relations for non-state enterprises.

Tariff system includes:

‣‣‣ tariff and qualification reference books to characterize professions and types for assignment of categories;

‣‣‣ tariff rates to determine the amount of wages for each category;

‣‣‣ tariff scales - this is a combination of tariff categories and tariff coefficients;

‣‣‣ salary plan for engineers and employees. If in the command-administrative system the tariff conditions for wages descended from the center and were controlled by the relevant ministries and departments, then in a market economy the state only brings the size of the all-Russian level of the minimum wage. Many market enterprises use tariff-free wage systems. At the same time, the amount of wages depends on the results of their economic activity.

3. Rent as the income of the owner of the land.

Land rent - land use fee.

The supply of land is absolutely inelastic, since its quantity is always stable and should not be increased.

Rent is one of the types of income from property. Its size is determined by the lease agreement. Land rent is the form in which landed property is economically realized and brings profit.

Lease is a broader concept than rent. It includes, in addition to rent, other payments: interest, depreciation, etc.

The only factor that determines rent is the demand for land. It depends on the price of products that can be produced on a particular land, and the productivity of the land itself. The points that set the rent lie at the intersection of the demand curve with the supply curve.

The surplus profit that arises on plots of land that are average and best in quality forms differential ground rent. Differential rent 1 associated with the natural features of the land and in connection with this it is appropriated by the owner of the land. Differential rent 2 arises due to additional investments of capital in the same plot of land (the use of new machines, the latest technologies, soil reclamation, etc.), which contributes to the growth of the economic fertility of the soil. The economic fertility of the soil ensures the growth of crop yields, and this brings additional profit to the entrepreneur.

It should be emphasized that the lands with the worst soil and climatic characteristics do not bring differential rent to their owners. It follows that the tenants of the worst plots must receive another kind of surplus profit in order to pay the rent and appropriate the normal profit. And they receive it in the form of absolute rent.

The reason for absolute land rent is the monopoly of private ownership of land. The value of this rent determines the low level of retail prices for land plots.

There is also monopoly rent. It is based on the monopoly price at which a product of rare quality is sold. A monopoly high price is determined by the ability of the buyer to pay a high price for a rare product, which means that it is a deduction from the income of buyers.

Land price depends on two factors: the amount of ground rent brought in and bank interest. If the land rent turns out to be lower than the bank interest, then the money will be placed in the bank. If the land rent is higher than the bank interest, then the probability of investing in land increases.

The price of land is ϶ᴛᴏ capitalized rent͵, i.e., rent͵ converted into money capital, which brings income in the form of interest. In general, the price of land in the whole world is growing, because the amount of rent is growing, the interest rate is decreasing and the demand for land is increasing

4. Interest and dividend.

Percent - it is a type of income. In practice, it can take the form of interest on capital, profits of the entrepreneur, premiums on the cost of factors of production, rent for the lease of property and land, dividends on securities, etc.

There are two concepts of interest: Marxist and neoclassical.

Marxist concept considers interest as a form (part) of surplus value. Its emergence is due to the fact that the borrower of capital, having produced surplus value, divides it into two parts: percent, given to the creditor and entrepreneurial income(profit) appropriated by the borrower. Consequently, interest appears as the irrational price of loan capital, ᴛ.ᴇ. it does not fully express the cost of loan capital. Labor is the only source of interest.

neoclassical concept(Samuelson, Fischer, Böhm-Bawerk) represents the percentage as the difference between the value of today's and future goods (income). It is believed that today's goods (money) are usually valued more than future blessings. Thus, refusing today's benefits, providing them on credit, the owner of these benefits has the right to count on appropriate compensation - percent.

It follows that the reasons for the appearance of interest are: psychological(the value of today's goods compared to the future); economic(current needs are more urgent, and resources are limited and therefore decreasing); technological(today's goods are worth more than future ones) motives.

The owner becomes creditor and the recipient of benefits (money) - borrower. The borrower must pay for the loan received in the form of interest. Consequently, the interest acts as a payment for the time determined by the term of the loan.

The ratio of interest in the form of a certain amount of money to the capital used is interest rate (rate of interest).

There are the following types of interest rates: market, average, nominal, real.

Market interest rate at any given moment is formed in the capital market based on supply and demand.

Average interest rate reflects the movement of the market rate over a certain period of time.

Nominal interest rate - is the interest rate expressed in money at the current exchange rate.

Real interest rate unlike the nominal interest rate, it takes into account the level of inflation. It is equal to the nominal interest rate minus the rate of inflation.

For making investment decisions, the real interest rate is of primary importance.

As you know, banks are most often used as intermediaries in the movement of loan capital; therefore, deposit and loan interest rates should be distinguished. Deposit interest rates- these are the norms for fees on bank deposits (the interest of depositors is calculated on them). Loan interest rates - This is the rate of payment for the use of a bank loan. The level of loan interest rates is always higher than deposit rates. Due to their difference, the bank covers its costs and makes a profit.

In general, the interest rate is under the influence of the state and is an important instrument of state regulation of the economy.

Dividend - ϶ᴛᴏ income from shares.

A share is a security that indicates that its holder has contributed a certain share to the development of an enterprise and gives the right to participate in profits.

The size of the dividend affects the share price.

The stock price is directly related to the dividend received and inversely related to the interest rate.

Factor income - concept and types. Classification and features of the category "Factor income" 2017, 2018.

The activity of any household and industrial enterprise is based on the application of production factors and the receipt of the appropriate income from this. Thus, in their work, these subjects use especially important objects and elements that have a significant impact on the possibility and efficiency of functioning. Consider further the main types of factor income.

General information

In market conditions, the formation of factor income has a number of features. However, in general, the well-known mechanism of competitive price equilibrium operates in this process. One or another production resource is always owned by the owner. No entity will transfer the right to use them to other persons free of charge. In recent decades, there has been a tendency to increase resource costs. As a result, factor incomes also decrease. In the economy, this leads to changes in the behavior of companies and citizens, makes it necessary for them to find substitutes for expensive resources, to look for ways to reduce production costs. Demand for funds is presented only by entrepreneurs. They refer to that part of society that can organize and implement the production of goods and services that are needed by the end consumer.

Theoretical aspect

Production is the process by which spiritual or material goods are produced. To start it, you must have at least a performer and material to create a service or product. As factors of production, Marxist theory singles out the means and object of labor, as well as the labor force of people. At the same time, science divides them into two groups. The first is a personal factor, and the second is a material factor. The first is presented in the form of labor force as a combination of spiritual and physical abilities of a person to work. The material factor is the means of production. The organization of an enterprise involves the coordinated interaction and functioning of these elements. According to Marxist theory, the interrelation of factors, the peculiarities of their combination determine the class composition in society, relations between public associations and the social orientation of the production cycle. The marginalist doctrine distinguishes four groups of elements used in the production of goods:

1. Entrepreneurial activity.
2. Capital.
3. Work.
4. Earth.

Factor income

As mentioned above, each resource has its own price. Factor income in the economy is the income that the owner receives from the use of production assets. In practice, several types of remuneration are determined:

1. Rent (mountain, land, water, and so on) as income from the use of natural resources.
2. Salary as a reward for work.
3. Interest as a factor income from the use of money capital.
4. Entrepreneurial income as a reward for the use of relevant abilities.
5. Profit as a factor income of the use of real capital.
6. Income from intellectual property in the process of using knowledge.

Behind each production factor is a certain subject (or group of them):

1. Labor belongs to the workers.
2. Land - landowners.
3. Entrepreneurial abilities - to the organizers of production.
4. Capital - owners.

All groups of these entities claim factor income from the total share of income.

Classification

In theory, receipts from resources are divided into individual economic and national economic. Factor income is:

1. population.
2. Enterprises.
3. States.
4. Society.

The totality of these receipts determines the highest demand for productive resources, services, goods.

Specificity

According to the results of their activities, the owners of resources receive nominal income - cash. Regarding them, complex relations are created between the state and the owner. The authorities, through the current tax system, collect a certain part of the funds. The amount that remains after paying off all liabilities is net factor income. The value of this balance is determined not only by the amount of money, but also by the dynamics and state of prices for services and goods. In this regard, there is such a thing as the purchasing power of funds.

The financial analysis

When conducting it, indicators are used that determine the marginal, average and gross factor income. The latter is the proceeds from the sale of all products in money. Average factor incomes are calculated per unit of products sold. Marginal revenue is the increment in gross revenue from the sale of additional products. It is considered as the ratio of receipts to the increase in the quantity of goods sold. The definition of this indicator is of particular importance for the company. In economic practice, the law of diminishing returns applies. The calculation of marginal revenue acts for the enterprise as a basis for changing production volumes in the direction of decrease or increase.

The essence of the law of diminishing returns

In the process of activity, any entrepreneur:

1. As far as possible accurately determines the socially significant order, qualitative and quantitative characteristics.
2. Organizes the management of the company so that the goals set are achieved.

These tasks are considered the main ones in the activity of the entrepreneur. A merchant is always trying to predict the market, to minimize risk and uncertainty. The entrepreneur must feel the limit beyond which the profitability of his enterprise will fall. In the process of managerial activity, the merchant is faced with the phenomenon of falling profitability. Its essence lies in the fact that the additional costs of one resource, with a constant number of others, give less and less volume of additional goods and, consequently, gross revenue. With a one-time and equal increase in the available factors of production, a different result can be obtained.

This situation can lead to an increase in the volume of output and gross revenue of the company. However, even in this case there is a risk. With an increase in product supply, the market value may decrease and the income from the sale of each additional unit of production may decrease. This indicates the need to reduce the production scale.

Pricing

The enterprise acts as a manufacturer and seller of products, as well as a buyer of factors. For him, as a distributor, the interest is typical to sell the goods as expensive as possible. Acting as a buyer in the market of production factors, he seeks to acquire the necessary resources as cheaply as possible. All these transactions are subject to revenue. It is considered the main incentive and indicator of the company's performance. The size of production costs and their structure determine certain requirements for the resource acquisition scheme. The only criterion in this process is the priority of the lowest manufacturing costs with a high quality of the manufactured goods. Comparing the market prices of production factors with the marginal products that are created with their help, the entrepreneur forms his choice.

Demand curve

The general principles in accordance with which its formation is carried out are reduced to the following provisions:

1. The starting point is the demand for manufactured products.
2. Achieving equality of marginal profits and costs determined by company policy.
3. The structure of demand for resources is created when the unit of capital spent on the acquisition of any productive means yields the maximum marginal product.

Labor supply

It has its own characteristics, which are associated with:

1. The number of the population and the number of its able-bodied part.
2. The qualitative composition of society, the degree of professional and general training.
3. The duration of the working week and day.
4. Compliance of the qualification structure of the able-bodied part with the needs of the national economic complex in workers of various specialties.

The general indicator of wages is determined at the point of intersection of the supply and demand curves. An increase in the need for labor increases the level of its payment. This, in turn, leads to an increase in employment. Decrease in demand for labor resources leads to opposite phenomena. In the process of the movement of the cost of capital, the availability of free funds, their supply and need for them are of particular importance.

Conclusion

As mentioned above, all owners of resources receive income from them. It is expressed in different forms and is of paramount importance for the movement of the enterprise in the market, the expansion of production. What acts as a profit for the owner of the resource is the cost for the consumer (buyer) of this factor.

Topic 17. Factor income: rent, interest, profit

The material factors of production - land and capital - in the respective markets acquire a price (land rent and interest), which is the income of the owners of these factors of production. As for income for such a factor of production as entrepreneurship (profit), its essence and nature are fundamentally different from the essence and nature of land rent and interest. This topic is devoted to the analysis of these three factor incomes.
The main questions of the topic:

Question 1. Land rent.
Question 2. Interest on capital.
Question 3. Profit.

Land (T) is a resource that is not produced, but exists as a natural object. Please note that the concept of "land" includes not just land area, but also forests, minerals, water resources, etc. As a factor of production, land is irreproducible and therefore quantitatively limited, of different quality (in terms of fertility, richness of deposits, location), immovable, characterized by a long period of use.
The price of land services is called land rent. In general, rent is income from any factor of production, the supply of which is inelastic. Land rent is the income of the owner of the land. Like any price, land rent is formed in the market - the land market, which is characterized by a completely inelastic supply. The purchase and sale of land services is carried out by leasing land.
The peculiarities of land as a factor of production and, above all, its irreproducibility explains the inelasticity of its supply. At any given moment, the amount of land offered by its owners is strictly fixed. Of course, in the long term, it can be increased by developing virgin lands, draining swamps, etc., but in the short and long term, the supply of land is constant.
Since the supply of land is inelastic, the rent depends entirely on the demand made by land users. In turn, the demand for land, as well as for any resource, depends on the productivity (productivity) of the land and on the demand for products produced with the help of land. If the demand for agricultural products increases, then the demand for land and its price increases. As the famous 19th-century economist wrote
E. Böhm-Bawer, "Tokay wine is not expensive because Tokay vineyards are expensive, but vice versa."
The formation of land rent is shown in fig. 17.1.

Suppose that initially demand is D1 and rent is R1. With an increase in demand for land and the invariance of its supply, land users are ready to pay a higher price for land services - land rent rises (R2> R1), with a decrease in demand, landowners cannot lease all the land and are forced to reduce land rent (R3 In practice, land rent is collected on the basis of a lease agreement as part of the rent, which, in addition to land rent, may include depreciation of structures and buildings located on the land, interest on capital invested in land, etc.
Land rent is the price of land services and the income of the land owner for a certain period of time, but in a market economy, land itself, as a capital good, is bought and sold. What is the price of land as a capital good? For what price will the owner of the land sell it?
Since, by owning land, the owner constantly receives income in the form of rent, then by selling the land, he actually sells the opportunity to constantly receive income, therefore he will give up his plot for such an amount that, being deposited in the bank, will bring him income no less than the rent they receive.
The price of land (Z) is the capitalized (turned into capital) ground rent.
R
Z = x 100%, i
where R is the annual rent;
i - bank interest.
Suppose that the owner of the land received an annual income (rent) equal to 100 thousand den. unit, the bank pays 10% per annum on deposits. It is obvious that the owner of the land will sell his plot for an amount not less than 1 million den. units, since by putting this amount in the bank, he will receive income at the level of ground rent.
In practice, along with the size of the rent and the level of bank interest, many other factors affect the price of land: an increase in demand for non-agricultural land, inflation (during inflation, the demand for land, as well as for real estate in general, increases), scientific and technical progress, etc.
In general, in the XX century. in the countries of the market economy, there was a steady upward trend in the price of land, caused by an intensive process of urbanization, inflation, which has become chronic in almost all countries.
Questions for self-examination

1. What are the characteristics of land as a factor of production?
2. Describe the demand for land. What does it depend on? Why is the supply of land perfectly inelastic?
3. What is land rent? How is it formed and what does it depend on?
4. What is the difference between land rent and land price?
5. How is the price of land determined? What factors affect the price of land?

The concept of "capital" is used in the broad and narrow sense of the word. In a broad sense, "capital" is any value that generates income (real estate and equipment, savings, securities, etc.). In the narrow sense of the word, capital (real, physical capital) is one of the factors of production, which is a stock of produced goods used in the production of other goods (buildings, machines, equipment, raw materials, materials, etc.).
Depending on the nature of the turnover, real capital is divided into fixed and circulating.
In terms of natural-material composition, fixed capital includes buildings, structures, machinery, equipment, etc. Elements of fixed capital:

1. used for many production cycles;
2. in the production process are used entirely and do not change their natural-material form;
3. are subject to replacement (reimbursement) after several production cycles;
4. transfer their value to the finished product in parts.

Working capital by natural-material composition includes
raw materials, basic and auxiliary materials. Elements of working capital:

1. are used during one production cycle;
2. in the process of production, they change their natural-material form;
3. are subject to replacement (reimbursement) through each production cycle;
4. transfer their value to the finished product completely within one production cycle.

Fixed capital is subject to physical and moral deterioration.
Physical depreciation is a decrease in the value of fixed capital elements as a result of their aging (wear and tear) when used in production or not used at all (corrosion, decay, etc.).
Obsolescence - depreciation of fixed capital elements due to cheaper production of similar machine tools, machines, etc., or due to the emergence of new, more productive equipment, as a result of which existing equipment loses its economic efficiency.
The depreciation of fixed capital as a result of depreciation is accompanied by a transfer of the value of fixed capital elements to finished products (depreciation).
Depreciation is the process of transferring the value of fixed capital elements as they wear out to the product produced with their help.
To compensate for worn-out elements of fixed capital, firms make depreciation deductions credited to production costs. After the sale of products, depreciation charges are accumulated in the form of a depreciation fund intended for the repair and replacement of worn-out elements of fixed capital.
Deductions to the depreciation fund are made on the basis of statutory depreciation rates (N0), which are the reciprocal of the service life.
No = (1: t) x 100%,
where t is the service life.
So, for example, if the machine costs 50 thousand rubles. and its service life is 5 years, then the depreciation rate will be 20% [(1: 5) x 100%], and the annual depreciation charge is 10,000 rubles. (50000x0.2). Depreciation charges are part of the cost of production.
Having characterized the features of real capital, let us consider the income that brings capital as a factor of production to its owner.
The income that capital can bring as a result of its use corresponds to the price paid for the use of money for a certain period of time (usually a year).
As already noted, money, money capital is not a factor of production, they are not capable of directly producing goods or services, but they are a condition for the acquisition of factors of production, including real capital. Entrepreneurs "buy" money (borrow) to acquire the physical capital needed to create goods and services. Hence: the demand for capital is the demand for borrowed funds. It is obvious that, using real capital, the entrepreneur must ensure such an income from its use that will allow him to pay for the money borrowed. The price paid for the use of money for a certain period of time is called interest (i). Thus, the interest on the use of money and the return on capital are one and the same value. It does not matter whether the entrepreneur uses borrowed capital or not. Using only his own capital, he must still receive at least a percentage return on it.
According to neoclassical theory, interest is a payment for the right to receive resources at your disposal today, i.e. before funds are accumulated to buy these resources.
Having resources today allows you to take actions that will provide a higher income in the future, so today's productive resources are valued more than future ones.
It should be noted that the payment for the use of money is usually considered not as an absolute value, but as a percentage of the income received from the provision of money to the total amount of money provided.
R
i = -^ x 100%,
C
where i is the rate (rate) of interest on capital;
Rc - return on capital;
C is capital.
If the loan is 100 thousand den. units, and the annual income is 5 thousand den. units, then the rate of interest (interest rate) will be 5% [(5000: 100000) x 100%].
The interest rate is determined in the money market and depends on the ratio of the demand for money that the business makes and the money supply. Distinguish between nominal and real interest rates:
- the nominal interest rate (i) is the monetary interest rate, which characterizes the income received at current prices;
- the real interest rate (r) is the inflation-adjusted interest rate, i.e. it characterizes income at constant prices:
r = i - n,
where n is the percentage of inflation.
Note that the real interest rate can be negative. If money is loaned at 20% per annum, and the annual inflation rate is 30%, then the interest rate will be negative.
The interest rate is used in the process of discounting - bringing income and expenses distributed over time to a single point in time.
Discounting is carried out according to the formula:
PV = FVn: (1 + i)n,
where PV is today's current value (money today);
FVn - value after n periods (money after n years);
i - discount rate (bank interest rate).
Suppose that the bank interest rate is 10% per annum and that, after graduating from the institute in five years, you will first receive a salary equal to 10 thousand rubles. What is the value of your future salary today? It is equal to 6211 rubles. .
The need for discounting arises whenever you need to compare today's expenses with future income. This problem arises when making investment decisions. By investing today, we will receive income in the future, so it is necessary to compare today's costs with future income. To do this, it is necessary to determine the current analogue (today's value) of the amount that will be received after a certain period of time at the existing rate of interest.
Comparison of the present value of future income with the cost of investment allows you to decide on their appropriateness.
Questions for self-examination

1. What is meant by capital in the broad and narrow sense of the word?
2. How does fixed capital differ from circulating capital?
3. What is physical and moral depreciation and amortization?
4. Why is the return on capital equal to the interest rate? How is the essence of interest explained theoretically?
5. What is the nominal and real interest rate?
6. What is the essence of the discounting process?
7. When is the investment worthwhile?

Profit - income received from the investment of such a factor of production as entrepreneurial activity. Unlike wages, interest, and rent, profit is not the equilibrium price of a resource; it is not formed on the market. The nature of profit is different.
The entrepreneur, combining the factors of production, organizing it, introducing innovations, taking risks, must receive a reward for all this. And this reward is the economic (net) profit - the remainder of the total income after deducting all production costs, both external and internal - lost when using their own resources (capital, land, entrepreneurial abilities). This balance is the income of the entrepreneur.
There are many theories explaining the nature of this residue.
Profit is the price of risk. The dynamic nature of the market economy gives it the character of uncertainty. An entrepreneur operating in conditions of uncertainty, making certain economic decisions, may incur various kinds of losses due to circumstances beyond his control, therefore, profit is considered as a reward for taking on an uninsurable risk.
Profit is the entrepreneur's reward for delaying personal consumption of own capital (abstinence theory).
Profit is the reward for innovation and the introduction of technical improvements. An integral element of entrepreneurial activity is innovation, and profit is a reward for finding, finding, and implementing better production methods.
Profit is income generated by the existence of a monopoly, i.e. profit is a "monopoly income" generated by artificial restrictions. By limiting output, raising its price, and keeping competitors out of the market, the entrepreneur can consistently make a profit.
It seems that profits cannot be sustained, as competition leads to a leveling of business conditions, and the advantages of individual firms, enabling them to make economic profits, are gradually spreading everywhere. However, the conditions that generate profit (initiative, innovation, risk, monopoly position) are continuously reproduced by millions of entrepreneurs, turning profit into a permanent phenomenon.
Profit in a market economy performs a number of important functions. Profit:

1. is an indicator of production efficiency. The presence of profit, ceteris paribus, indicates that the results of management exceed the costs incurred;
2. encourages the most efficient use of resources. It is the desire for profit that forces entrepreneurs to introduce the latest production technologies and improve the organization of production. As F. Hayek wrote, "the desire for profit is exactly what allows you to use resources most efficiently";
3. performs a distributive function, facilitating the movement of resources from one application area to another. The presence in any industry of profits in excess of its normal level attracts new entrepreneurs and leads to an overflow of resources, and a corresponding expansion of production.
4. finally, profit serves as a source of accumulation and financing for further development and improvement of production, creating conditions for making profit in the future.

Profit is the driving force behind the market economy. Firms seeking to maximize profits are objectively forced to produce goods that are in demand and produce at the lowest cost. Thus, profit serves the main economic purpose of satisfying people's needs with limited resources.

1. How is profit different from other factor incomes?
2. Which factor of production generates profit?
3. What is economic (net) profit and how is it calculated?
4. What are the interpretations of the essence of profit?
5. Name the main functions performed by profit.

Basic concepts and terms

Land, land supply, demand for land, land rent, rent, land price, capital, real capital, fixed capital, working capital, physical depreciation of capital, obsolescence of capital, depreciation, depreciation, loan interest, rate of interest (interest rate ), neoclassical theory of interest, nominal interest rate, real interest rate, discounting, investments and discounted returns, profit, profit theories, profit functions.

1. The specificity of land as a non-reproducible, heterogeneous, non-transferable factor of production predetermines the perfect inelasticity of its supply. Under these conditions, ground rent (the price of land services) is determined by the demand for land. In turn, demand depends on the productivity (productivity) of the land and the demand for agricultural products. The price of land as a capital good is the capitalized ground rent and is equal to the amount of money that, when put into the bank, will bring an income equal to the ground rent.
2. Capital as a factor of production is economic goods used to produce other goods. Depending on the nature of the turnover, capital is divided into fixed and circulating. Elements of fixed capital are used during many production cycles, do not change their natural form, transfer their value to finished products in parts, and are reimbursed after wear and tear. Elements of working capital are used during one production cycle, change their natural form, completely transfer their value to the finished product during one cycle. Fixed capital is subject to physical depreciation (decrease in the value of fixed capital elements as a result of their wear) and obsolescence - depreciation due to the emergence of new, more productive equipment or the reduction in the cost of production of existing equipment. The depreciation of fixed capital as a result of depreciation is accompanied by depreciation - the process of transferring the value of fixed capital to the product produced with their help. Depreciation is part of the cost of production. After the sale of products, depreciation charges are accumulated in the form of a depreciation fund intended for the repair and replacement of worn-out elements of fixed capital.
3. Return on capital is interest - the price paid for the use of money for a certain period of time. According to neoclassical theory, interest is a payment for the opportunity to use resources today. The interest rate is the ratio of the return on capital to the amount of capital multiplied by 100%. The nominal interest rate characterizes the income received at current prices; the real interest rate characterizes income at constant prices. The interest rate is used in the process of discounting - determining the present value of future earnings.
4. Entrepreneurship as a factor of production is charged with income in the form of net economic profit, equal to the difference between the sales proceeds and the economic costs of production (external plus internal costs, including normal profit). There are different interpretations of the essence of profit. It is considered as: a payment for risk, an entrepreneur's reward for innovation or for postponing personal consumption, income generated by the monopoly position of the company, etc. Profit performs the function of distributing the limited resources of society, stimulates their efficient use, creates a source for further development and improvement of production.

Lecture:

Resources and factors of production

Without the production of economic goods (goods and services) aimed at meeting the needs of people, no society can exist. Economic benefits are created with the help of resources. The resources involved in the production process are called its factors. Remember the key definition of this lesson:

Factors of production - resources used to produce goods and services.

One of the founders of modern economic theory, who studied the problem of choice in conditions of limited resources and limitless human needs, is Adam Smith, a British economist. XVIII century. He singled out three factors of production: labor, land, capital, which bring income to a person.

Labor, land, capital

Work- conscious economic activity of a person aimed at creating a useful result.

In the process of labor, a person spends physical and mental efforts and receives income in the form of salary . The wages of blue collar (manual) workers are on average lower than those of white collar (knowledge workers). The amount of wages depends on the qualifications of the employee, working conditions and the degree of risk. For example, Ivan Sergeevich and Yuri Petrovich teach the same number of hours in college, but Ivan Sergeevich has the highest qualification category, so his salary is higher.

Earth- these are natural resources (land, water resources, minerals) used in economic activity for the production of economic benefits.

Natural resources, unlike other factors, are limited and a person cannot change their size at will. Therefore, a consumer attitude towards nature, leading to the depletion or destruction of its resources, is not allowed. Land income is rent. Its size depends on the quality of the land. On two different plots of land with the same investment of labor and capital, there will be different productivity, and therefore rent.

Income from land can be obtained in different ways, for example, Andrei planted a cherry orchard on his land to sell cherries, and Vadim leased his land for the construction of a car repair shop (in the first case, the land belongs to the "Land" factor, and in the second case to the capital factor).

Capital- the totality of property used for the production of economic goods.

Capital is divided into financial (money, securities) and physical (buildings of workshops, warehouses, machinery, equipment, land plots as real estate). Capital income is called percent from profit. To obtain this type of income, a person invests (invests) his assets (financial or physical capital) in the production of goods or the provision of services. This use of assets in production is called capital investment. The percentage depends on the turnover and profitability of the enterprise. Investing is direct, when a person directly invests his free funds in any production. For example, Yuri invested 50% of the funds for the construction of a greenhouse complex, started by a friend. But there is also indirect investment. For example, Tatyana opened a deposit in a bank and will receive interest until the expiration of the contract with the bank. The bank itself invests the deposit funds.

Entrepreneurial ability and information

In the modern information society, factors of production such as entrepreneurial abilities and information are of great importance.

Entrepreneurial ability - the ability of a person to effectively combine all factors for the production of goods and services in order to make a profit.

This factor includes knowledge, professional, moral and psychological qualities of a person. Entrepreneurial income is profit. Its value depends on the education, initiative, responsibility and competitiveness of the entrepreneur. For example, two friends Sasha and Zhenya decided to open an electronic equipment repair company because there is nothing like this in their village, and people need such services.

Information- a resource used by an economic entity to solve the problems it faces.

Possession of reliable information is an important condition for the successful functioning of the enterprise, the rational choice of the consumer. For example, Sergei found a wholesale company that sells spare parts cheaper than the previous supplier. The businessman saved a lot and paid Sergey for information about a profitable supplier. One type of income from information is royalty– monetary reward to the author for the publication and distribution of his intellectual property.

Time factor according to A. Marshall

The success of production and the profit of the enterprise, according to English. economist A. Marshall, also depends on the time factor. Given this factor, the activity of the manufacturer is divided into three periods:

• instantaneous
• short term and
• long term.

These periods are distinguished by the possibility of using resources (factors) of production to increase the volume of output and extract more profit. As you know, the reason for the increase in production is an increase in demand. If the increase in demand occurs instantly, then the manufacturer does not have time to involve additional resources in production, increase the volume of output and earn more. Therefore, in this case, he only increases the prices of his products. In the short term (for example, a week or a month), the producer has little time to increase production before demand falls. During this time, he can, for example, hire a new employee. But in the short term, not all factors can be changed. Technologies, equipment, buildings, highly qualified workers remain constant, while the labor of employees with low qualifications, raw materials and materials can be variable factors. Over the long run, the producer can vary the scale of production by changing any factors of production. For example, in the long run, a firm may hire more highly qualified specialists or send workers for retraining, purchase more technologically advanced equipment, and even start producing new products. Thus, during the instantaneous market period, all factors of production are constant, in the short run, constant and variable, and in the long run, variable.

Types of factor income

Income from economic resources (factors of production) is called factor income. Owners of factors of production (economic resources) receive the following types of income:

from natural resources - rent (land, mining, payment for water, etc.);

from labor resources - wages;

from capital - interest (as the income of the owners of money capital) and profit (as the income of the owners of real capital);

from entrepreneurial abilities - entrepreneurial income;

from knowledge -income from intellectual property.

In economic life, especially for a firm, it is not always possible to distinguish between these types of factor income, especially since they are often combined with income from the sale of products.

Lorenz curve is a graphic representation of the distribution function. It was proposed by the American economist Max Otto Lorenz in 1905 as an indicator of income inequality. In this representation, it is an image of the distribution function, in which the shares of the population and incomes are accumulated. In a rectangular coordinate system, the Lorentz curve is convex downward and passes under the diagonal of the unit square located in the I coordinate quarter.

Each point on the Lorenz curve corresponds to a statement like "the poorest 20 percent of the population gets only 7% of the income." In the case of an equal distribution, each group of the population has an income proportional to its size. Such a case is described by the line of perfect equality, which is a straight line connecting the origin and the point (1;1). In the case of complete inequality (when only one member of society has an income), the curve (line of perfect inequality) first “sticks” to the x-axis, and then “soars” from the point (1; 0) to the point (1; 1). The Lorenz curve is enclosed between the curves of equality and inequality.

Lorenz curves are used to distribute not only income, but also household property, market shares for firms in an industry, and natural resources across states. You can also meet the Lorentz curve outside of economics.

53. Social protection in the Republic of Belarus: main directions and priorities.

Social protection- this is the implementation by state authorities and local government and self-government bodies, organizations and public associations of economic, social and legal measures aimed at ensuring conditions for the normal life of the population.

Public relations in the field of social protection are regulated by a variety of regulatory legal acts.

The presence of such a volume is directly due to the structure of the social protection system itself, which includes state social insurance, pensions, state benefits to families raising children, state targeted social assistance, social services, the provision of various benefits and guarantees to citizens.
and etc.

One of the most important areas of social protection is state social insurance as an organizational and legal form of social protection in general.

Pension provision is the most important component of the system of social protection of the population.

In order to improve the standard of living of pensioners, the legislative base in this sphere of public relations is being improved and developed.

Protection of the family, motherhood and childhood is also one of the most important areas of the social protection system, since the social progress of society, the size and quality of the population depend on the well-being of the family, its strength.

54. The concept of economic growth. Types of economic growth. Sources and factors of economic growth.

Economic growth is the exit of the economy beyond the limits of pre-existing production possibilities, its transition to a new, higher level. Economic growth is a component of cyclical economic development.

Economic growth is measured in two ways. The choice depends on what problem is being analyzed or for what purpose:

1) as an increase in real production of gross national product (GDP) or national income;

2) as an increase in both of them per capita.

Distinguish two types of economic growth- "extensive" and "intensive".

An extensive increase in the production of goods and services occurs due to the attraction of additional factors of production - land, labor and capital, while their qualitative and technical levels remain unchanged.

An intensive type of economic growth implies a more efficient use of the resources involved in production. Ways of efficient use of resources are diverse. So, for natural resources, this means the most complete extraction of useful properties, complex and deep processing of raw materials, protection of nature from destruction, etc.

With regard to the means of labor, which in the conditions of a market system of relations act in the form of "fixed capital", this means the use of its more productive elements - machines, machine tools, equipment, etc.

To economic factors include increasing the quantity and improving the quality of the resources used, to non-economic factors- military-political, geographical, climatic, national, cultural, etc.

55. The concept of the world economy. The main stages of the evolution of the world economy.

world economy- this is a set of national economies and economic relationships between them, or a set of production relations functioning at the national and international levels. Composite parts of the modern system of the world economy are:

1. national economies;
2. transnational corporations;
3. integration associations;
4. international economic organizations.

The totality of interacting national markets of individual countries, connected by international economic relations, forms world market(the beginning of the formation of the world market - the 16th century, the period of great geographical discoveries). Realization of the world market in the XVII century. became international division of labor in form of trade agreements between individual countries, which led to the emergence and development of the world economy. In modern conditions, it is increasingly acquiring features of integrity, objective circumstances which are:

1) the desire of the peoples of the world to survive in the face of increasing nuclear potentials and the threat of nuclear war and, in this regard, pursuing a policy of peaceful coexistence;

2) deployment of scientific and technological progress. No country in the world today can independently use all the achievements of modern science and technology, therefore, it is necessary to combine efforts in this area, which contributes to the establishment of close economic and scientific and technical ties between countries, the formation of sustainable structures in the world economy;

3) internationalization of economic life, international division of labor. The effective development of production processes at the level of world standards, the release of high-quality products by the countries of the world community is possible only if various forms of specialization and cooperation of production are used at the international level;

4) the need to unite the efforts of countries to solve global problems, mutual assistance in extreme situations;

5) the expediency of combining the economic efforts of the partner countries for the development of the wealth of the oceans and outer space;

6) preservation of acquired knowledge, ideas and their processing;

7) the use of increasingly complex information systems and the creation of an international information data bank, which could be used in accordance with its needs by each country of the world community.

56. Place of the Republic of Belarus in the world economy.

The Republic of Belarus carries out foreign trade operations with more than 180 countries of the world. The main trading partners of Belarus are: Russia, Germany, Great Britain, Poland, Ukraine.

Machines and vehicles, agricultural machinery, mineral products, nitrogen and potash fertilizers, products of the chemical and petrochemical industry, ferrous metals, and food products are most represented in the overall structure of exports.

Crude oil, gas, ferrous metals, food products and raw materials for their production are in the lead among imported goods.

Foreign trade in services in the Republic of Belarus in 2012 exceeded 10 billion US dollars. In foreign trade in services, a positive balance was formed in the amount of 2.8 billion dollars.

Services exports are dominated by transport services, travel and other business services. Recently, a high growth in the export of construction and computer services has been recorded.

The import of services is dominated by travel and transport services.

57. The structure of the world economy and trends in its development.

The structure of the modern world economy is a system of a market world economy, which consists of national markets for goods, services, capital of various countries, the internationalization of production and international associations of individual groups of countries, international financial centers. A feature of the modern world market is its polycentric nature, which manifests itself in the absence of a single center and the presence of a plexus of markets from different regions and countries. The development of the world economy took place in leaps and bounds from the division of a single world economic organism, its trade, labor, credit, financial, and monetary spheres from the end of the 19th century to the end of the 19th century. and until the middle of the 50s. 20th century under the influence of the division of economic resources by monopolistic groupings of industrialized countries to the unification of the above areas as a result of state regulation, the desire for a general stabilization of economies, overcoming cyclical and structural crises in the second half of the 20th century.

Trends:

1. Globalization and the emergence of a single global world is the most important trend in the development of the world economy, which goes far beyond purely economic processes. The modern world can be imagined as a set of mutually influencing and partly self-regulating processes. Global processes have gradually, evolutionarily created planetary feedback loops. It is these global connections that ensure the unity of the world economy.

2. Post-industrialization and the formation of a post-industrial society in developed countries. Its essence lies in the fact that an increasing number of people leave their jobs in industry and move into the service sector (tourism, hospitality, catering, utilities, transport, trade, etc.). Such a transition is often forced - in connection with technological development, industry and agriculture need an ever smaller amount of labor force, which is replaced by knowledge and capital embodied in technologies.

3. Informatization of the economy is the process of a gradual increase in the proportion of people involved in information activities, with a relative decrease in the proportion of people employed in industry and agriculture.

4. The process of financialization of the economy is an increase in the share of the financial sector of the economy in the GDP of the world and developed countries and the growth of the importance of this sector.

5. Formation of unified information and financial institutions. The circulation of finance is in many respects the circulation of a certain form of information. Money is primarily an information product. This became especially evident with the advent and spread of electronic money. Money, securities and financial instruments, gradually breaking away from their tangible material carriers, are increasingly showing their information essence.

6. Transnationalization of the world economy. Transnational corporations control up to half of world industrial production, 63% of foreign trade, as well as approximately 4/5 of patents and licenses for new equipment, technologies and know-how.

7. Formation of the ideological and institutional unity of the world economy.

8. Greening the world economy. Currently, the share of environmental costs of society, states and individual companies is increasing. Tougher environmental legislation.

58. International trade in goods and services.

International trade is the sphere of international commodity-money relations, a specific form of exchange of labor products (goods and services) between sellers and buyers from different countries. If a international trade represents the trade of one country with other countries, consisting of import (import) and export (export) of goods and services, then international trade is the aggregate of foreign trade of the countries of the world.

International trade in goods. International trade is also characterized by such categories as "export" and "import". Export (export) of goods means the sale of goods on the foreign market. Import (import) of goods is the purchase of foreign goods. Main forms of export (import):

– export (import) of finished products with pre-sale refinement in the country of the buyer;

– export (import) of finished products;

– export (import) of disassembled products;

– export (import) of spare parts;

– export (import) of raw materials and semi-finished products;

– export (import) of services;

– temporary export (import) of goods (exhibitions, auctions).

International trade in services.

At present, along with the goods market, the services market is also rapidly developing in the MX, because The service sector occupies a significant place in national economies, especially in developed countries. The service sector developed especially rapidly in the second half of the 20th century, which was facilitated by the following factors:

- the deepening of the international division of labor leads to the formation of new types of activity, and, above all, in the service sector;

- a long economic recovery in most countries, which has led to an increase in growth rates, business activity, the solvency of the population, the demand for services is growing;

- the development of scientific and technical progress, which leads to the emergence of new types of services and the expansion of their scope;

– development of other forms of IER

Specificity of services: services are produced and consumed at the same time, they are not stored; services are intangible and invisible; services are characterized by heterogeneity, variability of quality; not all types of services can be involved in international trade, for example, utilities; there are no intermediaries in trade in services; international trade in services is not subject to customs control; international trade in services, more than trade in goods, is protected by the state from foreign competitors.

59. International labor migration.

International labor migration is the process of moving labor resources from one country to another in order to find employment on more favorable terms than in the country of origin. In addition to economic motives, the process of international migration is also determined by political, ethnic, cultural, family and other considerations.

International migration includes two main components: emigration and immigration.

International migrants fall into five main categories:

Immigrants and non-immigrants legally admitted to the country. For countries that traditionally receive immigrants, the 1980s and 1990s were a period of high levels of immigration;

Contract migrant workers. Many countries depend on foreign labor. Agreements on its contracting are concluded between countries with excess labor in some parts of Asia and, for example, a number of countries in the Middle East, Europe;

· illegal immigrants. Almost all industrialized countries have illegal immigrants. Some of them cross the border, others remain in a foreign country with expired visas; they usually replace jobs at the bottom of the labor hierarchy;

persons seeking asylum. Until the 1980s, the number of this category was extremely insignificant, then it increased markedly. People apply for asylum for political reasons, as well as due to the difficult economic situation in their countries;

Refugees. According to the UN, there were more than 17 million refugees in the world in the early 1990s. Most of today's refugees are victims of wars. They usually live in special camps run by the UN or private agencies. It is estimated that only less than 1% of refugees settle in the developed countries of the West.

International labor migration is an objective process inherent in a market economy. It is as objective as the process of capital flow between countries, development of foreign trade relations, international economic integration. Labor resources, in accordance with market laws, are looking for the most profitable use, which gives maximum efficiency.

60. System of currency relations. Exchange rate

Currency relations - relations related to the functioning of currencies in the interstate exchange of goods, services, information.

The currency system is a form of organization and regulation of currency relations, enshrined in law. Monetary systems can be built according to various principles. Based on this, several types of currency systems of the world economy can be distinguished:

1. national currency system. This currency system determines the conditions for the organization and functioning of the national currency, fixed by law. In other words, it determines how the national currency will function, who will issue it and who will control it;
2. world monetary system. This system is a form of organization and functioning of national currencies on a global scale. The specifics of this monetary system is the lack of a single world currency and the functioning and accounting of national currencies of various states;
3. regional monetary system. This form is a new element of the universal monetary system and is an intermediate link between the previous types. A distinctive feature of this system is the regulation of the rules for the functioning of the currencies of a certain region when they strive for the emergence or use of one common currency. A striking example is the euro as a currency that appeared when the national currencies of the region were unified. In addition, the ruble can serve as a certain example, provided that it is accepted as a common currency by some CIS countries.

The exchange rate is the price of the currency of one country expressed in the currency of another.

The fixed exchange rate fluctuates around gold parity based on supply and demand. However, these limits usually do not exceed 1% parity. Otherwise, the state will be forced to raise or lower the gold content of its currency. Fixed exchange rates were typical for gold, gold exchange and gold-dollar standards.

A floating exchange rate involves the exchange of one currency for another depending on supply and demand.

Floating exchange rates are characteristic of the modern multi-currency standard, when the very concept of the "gold content" of the currency is outdated.

61. International monetary and financial structures (IMF, WB, EBRD, etc.).

International Monetary Fund(IMF) was created at the end of World War II as part of an effort to build a new, more stable international economic system and avoid the costly mistakes of previous decades.

International Monetary Fund:

promotes international cooperation in the monetary sphere;

· contributes to the stability of exchange rates and regulates the norms and rules in the monetary sphere;

· promotes the creation of a multilateral settlement system and the elimination of currency restrictions;

· Helps its members to correct imbalances in the balance of payments through the temporary provision of funds.

The main financial role of the IMF is to provide short-term loans to members experiencing balance of payments difficulties. The governing body - the Board of Governors, in which all member countries are represented - meets annually. The day-to-day operations are managed by an Executive Board of 24 members.

The World Bank (The World Bank) is an international financial organization established to organize financial and technical assistance to developing countries

The Millennium Development Goals are to be achieved by 2015 and include the following:

1. elimination of poverty and hunger;

2. ensuring universal primary education;

3. promotion of gender equality and empowerment of women;

4. reduction of child mortality;

5. improving maternal health;

6. fight against HIV/AIDS, malaria and other diseases;

7. ensuring sustainable development of the environment;

8. Building a global partnership for development.

European Bank for Reconstruction and Development- an investment mechanism created in 1991 by 61 countries and two international organizations to support a market economy and democracy in 34 countries - from Central Europe to Central Asia. As an international organization, the EBRD enjoys a number of privileges, such as the legal immunity of its employees.

The main shareholders of the bank are the USA, the countries of the European Union, Japan. The Republic of Belarus has been a full member of the EBRD since 1992. Since 1994, the Permanent Representative Office of the Bank has been opened in the Republic of Belarus. Cooperation is carried out on the basis of the Memorandum of Understanding between the Government of the Republic of Belarus and the EBRD dated February 19, 1993, as well as country strategies updated every three years, defining the main directions of the Bank's activities in Belarus.