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
What is utility maximization according to consumer behavior? Consumer Behavior: Utility Maximization A foundational hypothesis onto individual behavior within modern econ


What is the concept of the development? The concept of the development: Development is a complicated multi-dimensional concept to do along with enhancements in the human

What is the distinguishes a progressive income tax, from a proportional income tax, or a regressive income tax? A proportional income tax takes the similar percentage of a pe

Dependence on agricultural production: Dependence on agricultural production and primary product for exports. The external sector comprises Imports and Exports, Ghana shows de

Question 1: i) Use a simple human capital model to explain the rationale for undertaking higher education. ii) Why do some people vary significantly in the amounts of human

#queIn a particular year, an organization earns cash revenues of Rs. 2,00,000. Total material and labour expenses are Rs. 1,09,000. The depreciation claimed on the equipment is Rs.

how do minimum unit costs change with changes in fixed cost?

Show the possible outcome of setting a minimum wage for under-eighteens. Explaining and illustration of minimum wage - clearly set above market equilibrium outlining res

Use two market diagrams to explain how an increase in state subsidies to public colleges might affect tuition and enrollments in both public and private colleges.