ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Money as a Store of Value In the monetary economy, money is considered a store of value, where it can be used as a means of saving and allocating capital. Money’s property as a store of value facilitates a transfer of purchasing power over time.

Detailed explanation-2: -A store of value is essentially an asset, commodity, or currency that can be saved, retrieved, and exchanged in the future without deteriorating in value.

Detailed explanation-3: -Summary. Currency value is determined by aggregate supply and demand. Supply and demand are influenced by a number of factors, including interest rates, inflation, capital flow, and money supply. The most common method to value currency is through exchange rates.

Detailed explanation-4: -Money serves as a store of value for goods in liquid form. Savings in the form of money are not only secure but the possibility of it being disrupted is very low. Besides, money can be carried around and is portable. By facilitating accumulation of money, money has become the only basis of promoting capital formation.