1.

Explain the "Store of Value" function of Money.

Answer»

(i) We find that individuals don't spend their entire income. They may save a part of their income to store it for use at later date.

(ii) They do this as they know that money will be acceptable at any time in future for buying any commodity which they desire.

(iii) In the barter system, it is difficult to store commodities as it involves costly storage/reduction in quality or value of the stored commodity. Thus, money overcomes the problem of storage that exist in barter system.



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