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
how distribution is arranged to provide customer service



Explain why both the PES and PED tend to be inelastic in the short run for primary goods. PED deals with (primarily) the ability and propensity of consumers to switch to other

i want to know that ,wheather lithium iodide can be used as redox electrolyte? and acetonitrile canbe used as redox electrolyte? ehich is more efficient?n..

introduction of production

1. Calculate the required reserve ratio. 2. Assume that Pam wants to borrow money to pay for a new car from Sharpeland Bank. a. What is the maximum amount that Sharpeland Ban

Sir/Ma''am i have to make a project of 4-5 page on Investigating the buying behavior of individuals in the white goods sector and seeing if there exists any negative relationship b

1-      a-  What are the five components of a time series? b- Briefly explain how you would estimate each component. c- What does deterministc trend mean?  How do you detren