What are the main functions of money? How does money overcome the shortcomings of a barter system?
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Money is often defined in terms of the three functions or services that it provides. 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.
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The use of money meant that people could sell their surplus of goods in exchange for money and use the money earned to buy their needs. Money acted as a medium of exchange, a measure of value, a store of value, a standard for postponed payment and deferring payment so that means that trade became simpler.
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The use of money meant that people could sell their surplus of goods in exchange for money and use the money earned to buy their needs. Money acted as a medium of exchange, a measure of value, a store of value, a standard for postponed payment and deferring payment so that means that trade became simpler.
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