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Functions of Money
When money replaced the barter system, a lot of practical issues were solved. Money acts a medium of exchange, a unit of measurement, a store of value and a standard of deferred payments. It plays an important role in transactions.
Money should be accepted liberally in exchange of goods and services in a country.
Money should be the common, standard unit of calculating a country’s total consumer goods, products, services etc. For example, if a book costs ` 50, it means that the price of the book is equale to 50 units of money. Money is used to measure and record financial transactions in a country.
Money is used as a store of purchasing power. It can be used to finance future payments.
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