Functions of Money 💵 Flashcards
1
Q
What is money?
A
Money- anything acceptable for payment of 🚘 or 🧹 or debt
2
Q
Why has the development of money been important?
A
Development of 💵- allowed trade to grow- previously reliant on barter (good for good)- not as good as requires double coincidence of wants
3
Q
How many functions of money are there?
A
4
4
Q
What are rate 4 functions of money?
A
1) Method of deferred (delayed) payment- borrowing or lending (loans)- price usually set for this (form of interest x%)
2) Medium of exchange- buying & selling products- eliminates barter
3) Measure of value- places value on products- unit of measure- allows comparisons of products- determines relative values
4) Store of value- storing wealth- 💵 can be spent at later date- 💵 holds value- if inflation low
