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What do you understand by value of money ? |
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Answer» Economists have interpreted value of money in different ways, but the most prevalent meaning of value of money is implied in its purchasing power. This means that the quantity of goods and services that could be purchased in exchange of one unit of money, is its value. For Example – 1 kg wheat costs Rs. 20. It also means that 1 kg of wheat can be purchased for Rs. 20, therefore the purchasing power of 1 kg of wheat is equal to the sum total of Rs.20. |
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