Question

Distinguish between Primary functions of money and Secondary functions of money.

Answer 1

Primary functions are known as original functions. They are medium exchange and measure of value. Secondary functionsinclude standard of deferred payments, store of value and transfer of value. Contingent functions cover distribution of income, measurement and maximisation of utility.

Answer 2

Distinguish between Primary functions of money and Secondary functions of money is as follows:

• Primary function of money is a medium by which the value is exchanged and measured. This is also called original function.
• Standard of deferred payments, transfer and store of value are recognized as secondary function of money.