ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A unit of account can be divided so that its component parts will equal the original value. If you divide a dollar into four quarters, the total value of the four quarters still equals a dollar. Likewise, if you cut a bar of gold in half, the two pieces together will equal the same value as the original bar as a whole.

Detailed explanation-2: -Money became a powerful medium for comparing prices of goods and services. It became the standard unit of measurement in terms of which the value of all goods and services are being measured and expressed (known as price). It is treated as the standard unit of borrowing and lending activities.

Detailed explanation-3: -To summarize, money has taken many forms through the ages, but money consistently has three functions: store of value, unit of account, and medium of exchange.

Detailed explanation-4: -Money’s property as a store of value facilitates a transfer of purchasing power over time. Another defining property of money is its use as a medium of exchange, which means that money is a carrier of a store of value between independent transactions.