money functions

2. The word money is being derived
from the Latin word ‘MONETO’.
Money can be defined as any
commodity that is generally
accepted as a medium of exchange
and a measure of value.

3. Functions of Money
•Primary Functions:
Medium Of Exchange: The fundamental
role of money is to serve as a medium of
exchange . A consumer can purchase any
commodity or service with help of
money.

4. Measure of Value : The value of
all goods and services is
expressed in terms of money . It
helps to compare value of all
commodities . Every country has
a standard money or a monetary
unit in terms of which values are
expressed and measured which
is known as currency such as
dollars, pounds, yen etc

5. Secondary Functions:
a) Standard Of Deferred
Payments : Future Payments are
termed as deferred payments.
Deferred payments are possible
only because of money . Money
makes possible the credit
transactions to happen . Money
acts as a standard of deferred
payments.

6. (b) Store of Value : Money
works as a store of value along
with satisfaction of present
wants , provisions for future
wants is equally important . It
serves as a store of value
because money has purchasing
power .

7. c) Transfer of Values : Today
with the extension of trade
among various countries and
organizations ,it becomes
necessary to transfer
purchasing power from one
place to another.

8. Kinds of Money
•Metallic Coins
•Paper Money