State the four functions of money. Explain any one of them.

1.	State the four functions of money. Explain any one of them.
Answer» (i) Medium of exchange (ii) Measure of value (iii) Standard of deferred payments (iv) Store of value Standard of deferred payment:- Deferred payment refers to those payments which are made in future. Money as standard of deferred payment has facilitated market transactions of buying, selling, pension, borrowing etc. When we borrowed money from somebody in the present we have to return both the principle as well as interest amount at future date. It is easy to make such payments in terms of money because their prices remain relatively constant compare to other commodities.

Answer»

(i) Medium of exchange

(ii) Measure of value

(iii) Standard of deferred payments

(iv) Store of value Standard of deferred payment:- Deferred payment refers to those payments which are made in future. Money as standard of deferred payment has facilitated market transactions of buying, selling, pension, borrowing etc. When we borrowed money from somebody in the present we have to return both the principle as well as interest amount at future date. It is easy to make such payments in terms of money because their prices remain relatively constant compare to other commodities.

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