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Functions of Money

Answer Text:
Functions of Money
(i) Medium of exchange: It is generally acceptable by everyone in exchange
of goods and services. It thus eliminates the need for double coincidence of wants.
(ii) Store of value: It is used to keep value of assets e.g. surplus goods can be sold and then money kept for future transactions.
(iii) Measure of value: Value of goods and services are expressed in money form. Performance of businesses is measured in terms of money.
(iv) Unit of account: It is a unit by which the value of goods and services are calculated and records kept.
(v) Standard of deferred payment: it is used to settle credit transactions.
(vi) Transfer of immovable items (assets): Money is used to transfer assets such as land from one person to another.