Explain the significance of money in the modern economic system
What are its evils ?
Answers
Answer:
Money serves as a medium of exchange, as a store of value, and as a unit of account. Medium of exchange. Money's most important function is as a medium of exchange to facilitate transactions.The primary function of money is that it acts as a medium of exchange. It is an efficient way to remove inconveniences of barter system. It is freely accepted for purchase or sale of any goods. It eliminates double coincidence of wants and can be directly exchanged in the market.
Answer:
In economics, economic value is a measure of the benefit provided by a good or service to an economic agent. It is generally measured relative to units of currency, and the interpretation is therefore "what is the maximum amount of money a specific actor is willing and able to pay for the good or service"?
Among the competing schools of economic theory there are differing theories of value.
Economic value is not the same as market price, nor is economic value the same thing as market value. If a consumer is willing to buy a good, it implies that the customer places a higher value on the good than the market price. The difference between the value to the consumer and the market price is called "consumer surplus".[1] It is easy to see situations where the actual value is considerably larger than the market price: purchase of drinking water is one example.
Explanation: