Functions of money in any modern economy, Microeconomics

Functions of money in any modern economy:

A medium of exchange: Money facilitates the exchange of goods and services because, people exchange the goods and services they produce for money and then use the money to buy other goods and services they want. This enabled man to overcome the problem of ‘double coincidence of wants’ associated with trade by barter.

A unit of account or a measure of value: Money serves as the unit in terms of which the values of goods and services are measured and recorded.

A store of value: Money provides the purchasing power in a general form that can be used to meet future needs of goods and services.Under the barter system, articles of trade are easily perishable and cannot be stored for future transactions.

A standard of deferred payment: Money makes it possible for people to enter into contracts, such as lending, borrowing, and enjoyment of services for fixed amount of money payable at a future dates. The exchange rate problem makes this impossible under the barter system.

Posted Date: 1/3/2013 1:35:10 AM | Location : United States







Related Discussions:- Functions of money in any modern economy, Assignment Help, Ask Question on Functions of money in any modern economy, Get Answer, Expert's Help, Functions of money in any modern economy Discussions

Write discussion on Functions of money in any modern economy
Your posts are moderated
Related Questions
illustration for demand of big macs using indifference curve and budget line

1. Calculate price elasticity of demand and supply for the following functions when (a) P=8 and (b) Q=6. i. P= 40 - 0.5Q ii. Q= -40 + 0.75P iii


THEORY OF INTER-TEMPORAL CONSUMPTION: In the previous two units, we have been concerned with choices among contemporaneous commodities. An important class of choices made by c

1. Definition: AGE-SPECIFIC DEATH RATE is the total number of deaths to residents of a specified age or age group in a specified geographic area (country, state, county, etc.)

what are the benefits of natural resources and industryquestion..

Unemployment Rate A measure of labor force utilization the unemployment rate is equal to the number of people which is unemployed as a percentage of the total labor force.

1. The total demand (marginal benefit) curve for visiting the Great Barrier Reef is as follows: Price = 5000+100*Fish Biomass (tons per square mile) -10*Number of Trips.   a. Do

why sellers and producers keep pricess lower