A)Explain the four functions of money

ANSWER-

??FUNCTIONS OF MONEY- There are four functions of money. These are as follows-

1.) Medium of exchange

2.) Measure of value

3.) Standard of deferred payment

4.) Store of value

1.) MEDIUM OF EXCHANGE-

The most important function of money is medium of exchange. This function removed all difficulties related to barter system. Now any person can sell his goods or services in exchange of money. From that money he can buy other goods he want by giving the money because money is acceptable everywhere.

2.) MEASURE OF VALUE-

Measure of value is another important function of money. The value of any goods and services can be measure by money. All goods and services are measured in a particular unit of money which help to compare the the value of different goods and services.

3.) STANDARD OF DEFERRED PAYMENT-

The another important function of money os standard of deferred payment. Deferred payments means payments which are to be made in future. For example loan payments are to be ade in future. Money set a standard for value because value may be change in future.

4.) STORE OF VALUE-

Store of value is another function of money. Money is most liquid compared to all other assets. So it can be store as an asset. There is no wastages while storing like in stock. So money performs function store of value.