ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Money is often defined in terms of the three functions or services that it provides. Money serves as a medium of exchange, as a store of value, and as a unit of account.

Detailed explanation-2: -You just need a market in which to sell your goods or services. In that market, you don’t barter for individual goods. Instead you exchange your goods or services for a common medium of exchange-that is, money. You can then use that money to buy what you need from others who also accept the same medium of exchange.

Detailed explanation-3: -In modern economies, the medium of exchange is currency. A currency must remain reasonably stable in value in order for it to work as an intermediary.

Detailed explanation-4: -in fact, a variety of items have been used as money over the centuries. The items that worked the best tended to have four basic characteristics: portability, divisibility, durability, and acceptability.