Theme 1.1 - Function of money

Question 1

What are the 4 functions of money?

Answer 1

Method of exchange
Store of value
Measure of value
Standard of deferred payment

Question 2

In what ways is money a method of exchange?

Answer 2

Commodities swapped in return
More efficient than traditional methods

Question 3

In what ways is money a store of value?

Answer 3

Has a fixed value
More liquid than other stores
Readily accepted everywhere

Question 4

In what ways is money a measure of value?

Answer 4

Values goods + services
Known as a unit of account
Enables provider + consumer to make good decisions