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Fuction of money in detail |
| Answer» \tMoney\'s most important function is as a medium of exchange to facilitate transactions.\tIn order to be a medium of exchange, money must hold its value over time; that is, it must be a store of value.\tMoney also functions as a unit of account, providing a common measure of the value of goods and services being exchanged.\tWithout money, all transactions would have to be conducted by barter, which involves direct exchange of one good or service for another.\t\xa0In other words, in a barter system, exchange can take place only if there is a double coincidence of wants.\tMoney effectively eliminates the double coincidence of wants problem by serving as a medium of exchange that is accepted in all transactions. | |