ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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: -One of the functions of money in an economy is that it serves as a store of value. A store of value is something that people use to transfer purchasing power from the present to the future.

Detailed explanation-3: -Money has a store of value because it is an asset that can be invested, stored in a bank, left in a safe at home, and then later used to purchase something in the future. Store of value is an important money function because it helps facilitate trade in the future.

Detailed explanation-4: -Money as a Store of Value So, when people exchange items for money, that money retains a particular value that can be used in other transactions. This ability to function as a store of value facilitates saving for the future and engaging in transactions over long distances.

Detailed explanation-5: -The purchasing power of currency is the quantity of goods and services that can be bought with a monetary unit. Because of rising prices, the purchasing power of currency deteriorates over time. Outside of the country, it drops in cases of depreciation and devaluation and increases with the opposite.