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Money:
Money can be defined as any thing that is generally acceptable as a means of exchange and at the same time acts as a measure and as a store of value.
It is an essential quality of money that it should be acceptable as a means of payment. The economy can not work efficiently unless money serves as a Standard of value.
Following are the important functions of Money:
Medium of Exchange: Money serves as a medium of Exchange. It passes from hand to hand in exchange for goods and services. Goods buy money and money buys goods.
Store of Value:
Perishable goods can not be stored for a longer period. In this case money has an advantage over goods, so money provides as easy means of storing wealth as compared to other goods.
Standard of Deferred Payments: In case of transaction involving future payments money enables exchange of present goods for future goods.
Money as a Liquid Asset: Money is the liquid asset because it can be used at any time. We can purchase any thing or we can save it for future or we can do the investment. There is no problem in using it.
Money can be defined as any thing that is generally acceptable as a means of exchange and at the same time acts as a measure and as a store of value.
It is an essential quality of money that it should be acceptable as a means of payment. The economy can not work efficiently unless money serves as a Standard of value.
Following are the important functions of Money:
Medium of Exchange: Money serves as a medium of Exchange. It passes from hand to hand in exchange for goods and services. Goods buy money and money buys goods.
Store of Value:
Perishable goods can not be stored for a longer period. In this case money has an advantage over goods, so money provides as easy means of storing wealth as compared to other goods.
Standard of Deferred Payments: In case of transaction involving future payments money enables exchange of present goods for future goods.
Money as a Liquid Asset: Money is the liquid asset because it can be used at any time. We can purchase any thing or we can save it for future or we can do the investment. There is no problem in using it.
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