Question

Write short note on secondary function of money

Answer 1

Money, as a medium of exchange, means that it can be used to make payments for all transactions of goods and services. It is the most essential function of money. ... This function of money facilitates trade and helps in conducting transactions in an economy.

Answer 2

Answer:

The secondary functions of money are the standard of deferred payments, the store of value and the transfer of value.

This refers to the certain money functions that are in addition to the primary functions. Such functions are derived from primary functions and are therefore often referred to as ' Derivative Functions. '

• Deferred payment - Money as a deferral standard means money acts as a standard for payments to be made in the future. There are millions of transactions every day that do not make payments immediately. Money fosters these transactions and helps the economy to create resources and grow economically.
• Store of value - Money as a value store means money can be used to transfer buying power from the present to the future. Money is the way resources can be held. While wealth may also be stored in other forms, money is the most cost-effective and convenient way. It provides individuals with security in meeting contingencies, unpredictable emergencies, and paying future debts.