Functions of Money Flashcards
1
Q
What are the four functions of money?
A
Unit of Account
Means of Exchange
Store of Value
Legal Tender
2
Q
What is Unit of Account?
A
Refers to the money that can be used to place a value on goods and services.
3
Q
What is Means of Exchange?
A
Refers to how money is used to sell, buy or trade goods and services.
4
Q
What is Store of Value?
A
Refers to how money is stored (ISA’s, Banks) to be used at a later date.
5
Q
What is Legal Tender?
A
Money is the legal means used to pay for goods and services.
