Question

Explain store of value function of money.​

Answer 1

Money is a type of asset in an economy that you can use to buy goods and services from other people or businesses.One of the functions of money in an economy is that it serves as a store of value.

Answer 2

In simple terms,money can be used both for present and future commercial exchange or transaction of goods and services.Hence,it possesses store value in the future and reflects the purchasing power for future transactions.

Explanation:

Any amount of money earned or obtained in the present time can be legitimately and effectively used for any future commercial purposes.It can be practically stored and used for any future commercial exchange or transaction anytime in future.In other words,money exhibits both present and future purchasing power or capacity and has permanent commercial value.In this context,any inflationary impact in the economy would reduce the real purchasing power of money in the future and hence,the interest rate on financial loans will increase.