What are the contingent functions of money ?

1.	What are the contingent functions of money ?
Answer» The contingent functions of money are as follows : (i) Distribution of Social Income – Money facilitates the just distribution of social income. Production activities are done by the collective efforts of various means of production, hence it is necessary to distribute the income obtained from produced commodity in a just and equitable manner. This has been made possible by money. (ii) Basis of credit – It is money which has created the credit system. Money has made it possible for banks to extend loans. (iii) Liquidity of wealth – Money provides liquidity to capital or wealth. Today, any person can sell his house in one city, collect the money and easily purchase another house in another city.

Answer»

The contingent functions of money are as follows :
(i) Distribution of Social Income – Money facilitates the just distribution of social income. Production activities are done by the collective efforts of various means of production, hence it is necessary to distribute the income obtained from produced commodity in a just and equitable manner. This has been made possible by money.

(ii) Basis of credit – It is money which has created the credit system. Money has made it possible for banks to extend loans.

(iii) Liquidity of wealth – Money provides liquidity to capital or wealth. Today, any person can sell his house in one city, collect the money and easily purchase another house in another city.

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