ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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. That means money can keep track of changes in the value of items over time and multiple transactions.

Detailed explanation-2: -Unit of account. Money also functions as a unit of account, providing a common measure of the value of goods and services being exchanged.

Detailed explanation-3: -Money serves as a common medium or unit of account. As various goods and services are measurable in different units such as meter, litre and gram, it becomes difficult to measure them using a common unit. Money has provided a common yardstick to measure all these different units in a common denomination known as price.

Detailed explanation-4: -A unit of account is a means for comparing the values of goods and services.

Detailed explanation-5: -Summary. Money is a set of assets that are generally used and accepted as a medium of exchange for goods and services in an economy. Apart from its function as a medium of exchange, money also serves as a store of value and a unit of account. Everything that fulfills these three functions can be considered money.