ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Money is any object that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally, a standard of deferred payment.

Detailed explanation-2: -Define-What does it mean to say that money is an acceptable form of payment? ( p. 233) A person that accepts money as a form of payment can use it for something else.

Detailed explanation-3: -Money is anything generally accepted as a means of paying for goods and services and for paying off debts.

Detailed explanation-4: -Money as a Medium of Exchange A medium of exchange is an asset that can be used in a transaction to exchange goods and services. Gold and other precious metals have been used as a medium of exchange before money itself, or alongside it. Not every asset can be used as a medium of exchange.

Detailed explanation-5: -Money as a Unit of Account Due to money’s use as a medium of exchange for buying and selling and as a value indicator for all kinds of goods and services, money can be used as a unit of account.