Functions and role of money Flashcards
1
Q
Name all the functions of money
A
- Unit of account
- Means of exchange
- Store of value
- Legal tender
2
Q
What is unit of account?
A
- Allows us to place a monetary value on goods and services.
3
Q
What is means of exchange?
A
- It allows us to trade. Businesses and customers can buy and sell goods and services using money.
4
Q
What is store of value?
A
- It allows us to use it in the future as it keeps its value. For example, saving money in a bank to use it in the future.
5
Q
What is legal tender?
A
- It is a legally recognised form of payment. Money is widely recognised and used for all sorts of transactions.
