The role of money

Money is any item or verifiable record that is generally accepted as payment for goods and services, as well as for the repayment of debt, within an economy.

Money is said to have four functions

  • Medium of Exchange:  used for buying and selling goods.
  • Store of Value: We value goods and wealth through money. Money makes it easy to compare goods
  • Standard of Deferred Payment: Money is used to pay back debt.
  • Unit of Account: prices and accounting records use money

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