Question

Explain money as a measure of value.

Answer 1

The main function of money is as a measure of value and this is said so because money can be used as a measure to determine the value of various goods.

Money has been used since ages now, after the eradication of the Barter system of exchange because the value of goods and services can be easily measured with this form of currency.

In the Barter system of exchange, it was difficult for people to determine the value of various goods.

Answer 2

Money as a measure of value is expressed in units of currency that determine the value of goods and services which are also measured by the unit of value.

EXPLANATION:

• The value of goods and services is measured with the value of money.  

• Money is the common factor through which a person can buy or sell goods and services.  

• It serves as the medium of exchange with a value attached to it.  

• The national income of the country is also shown in terms of money and its value.