Define money and write three advantages of money 0
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current medium of exchange in the form of coins and banknotes; coins and banknotes collectively.
Money as a medium of exchange:
The purchasing and selling are done through the money. In the other words, money is used as a medium of exchange, which removes the problem of double co-incidence of wants in a barter system. The money is used as a medium of exchange promoting the efficiency in the economy.
It has reduced much of time spent in exchanging goods and services.It has also promoted efficiency by allowing people to specialize in any area in which they have a comparative advantage and receive money payments for labor.
2.Money as a unit of account:
The important function of the money is that it provides a unit of account. The monitory unit of account helps to measure the value of goods and services. For example, we measure weight in kg. Distances are measured in km, similarly, the value of goods and services are measured in money.
So money is a yardstick which allowed an individual to measure the comparative value of goods and services.
3.Money as a store of value:
Money also functions as a store of value. The money, which you have today, is a side to purchase a thing later on. So they wait for until he has to desire to spend it. Money held’s in the form of cash is considered highly liquid assets.
4.Money as a standard of deferred payments:
In today economy buying and selling of goods are made on the basis of credit. So money is a medium of exchange. Which are used to settle the debts maturing in future? Debts are stated and paid in terms of unit of account.
Money as a medium of exchange:
The purchasing and selling are done through the money. In the other words, money is used as a medium of exchange, which removes the problem of double co-incidence of wants in a barter system. The money is used as a medium of exchange promoting the efficiency in the economy.
It has reduced much of time spent in exchanging goods and services.It has also promoted efficiency by allowing people to specialize in any area in which they have a comparative advantage and receive money payments for labor.
2.Money as a unit of account:
The important function of the money is that it provides a unit of account. The monitory unit of account helps to measure the value of goods and services. For example, we measure weight in kg. Distances are measured in km, similarly, the value of goods and services are measured in money.
So money is a yardstick which allowed an individual to measure the comparative value of goods and services.
3.Money as a store of value:
Money also functions as a store of value. The money, which you have today, is a side to purchase a thing later on. So they wait for until he has to desire to spend it. Money held’s in the form of cash is considered highly liquid assets.
4.Money as a standard of deferred payments:
In today economy buying and selling of goods are made on the basis of credit. So money is a medium of exchange. Which are used to settle the debts maturing in future? Debts are stated and paid in terms of unit of account.
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Heya...
Money is what that money does...It is a commonly accepted instrument as a medium of exchange.....
It's advantages...
* Money can be used as a future transitions ...It can be changed for further deals....
* Money is not heavy to carry from one place to other in respect to commodity..
* Money can be stored as in the terms of investment having the same value for all...
Money is what that money does...It is a commonly accepted instrument as a medium of exchange.....
It's advantages...
* Money can be used as a future transitions ...It can be changed for further deals....
* Money is not heavy to carry from one place to other in respect to commodity..
* Money can be stored as in the terms of investment having the same value for all...
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