The functions of money are as follows: 

1. Medium of exchange: Money plays an important role as a medium of exchange. It facilitates exchange of goods for money. It has solved the problems of barter system. Money has widened the scope of market transactions. Money has become a circulating material between buyers and sellers. 

2. Measure of value/unit of account: The money acts as a common measure of value. The values of all goods and services can be expressed in terms of money. 

3. Stork of value: People can save part of their present income and hold the same for future. Money can be stored for precautionary motives needed to overcome financial stringencies. Money solves one of the deficiencies of barter system, i.e. difficulty to carry forward one’s wealth under the barter system. 

4. Transfer of value: Money acts as a transfer of value from person to person and from place to place. As a transfer of value, money helps us to buy goods, properties or anything from any part of the country or the world. Further, money earned in different places can be brought or transferred to anywhere in the world.