Define Money. Explain the secondary functions of money.

1.	Define Money. Explain the secondary functions of money.
Answer» Money is anything which is universally accepted as a medium of exchange, measure of value, store of value and standard of deferred payments and has divisibility and transferability. Money is the means of valuation and of payment; as both the unit of account and the generally accepted medium of exchange. 1. Standard of deferred payment : Most of the business transactions are done on credit basis, which call for future payments. Borrowing and lending is generally carried in terms of money whose value remain fairly stable. 2. Store of Value : Money enables a person to preserve value without fear of loss. Money can be stored easily in banks without loosing its value, risk and uncertainty. 3. Transfer of Value : Money serves as a transfer of value from place to place and from time to time. It can be transferred from one place to another through cheques, money orders and drafts.”

Answer»

Money is anything which is universally accepted as a medium of exchange, measure of value, store of value and standard of deferred payments and has divisibility and transferability. Money is the means of valuation and of payment; as both the unit of account and the generally accepted medium of exchange.

1. Standard of deferred payment : Most of the business transactions are done on credit basis, which call for future payments. Borrowing and lending is generally carried in terms of money whose value remain fairly stable.

2. Store of Value : Money enables a person to preserve value without fear of loss. Money can be stored easily in banks without loosing its value, risk and uncertainty.

3. Transfer of Value : Money serves as a transfer of value from place to place and from time to time. It can be transferred from one place to another through cheques, money orders and drafts.”

Define Money. Explain the secondary functions of money.

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