Question

What are the three basic functions of money ?

Answer 1

Answer: Money has three primary functions. It is a medium of exchange, a unit of account, and a store of value: Medium of Exchange: When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange.

Answer 2

Answer:

(1) Medium of exchange

Money can be used in exchange for goods and services. This reduces transaction costs by a huge margin because people no longer need to barter.

2) Store of value

Money can serve as a store of value. That means, it can be used to transfer buying power into the future.

(3)  Unit of account

Money is also a measure of economic value. Every good you can buy in a shopping center has a price tag on it. Thanks to that we can easily compare the value of completely different goods.

Explanation:

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