ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Money has also solved this difficulty. Money serves as a yardstick for measuring the value of goods and services. As the value of all goods and services is measured in a standard unit of money, their relative values can be easily compared.

Detailed explanation-2: -Money serves as a common medium or unit of value. The goods and services are of different types and are measurable in different units such as, meter, litre, gram, etc. Money has provided a common yardstick to measure all these different units in a common denomination known as price.

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: -Money serves several functions: a medium of exchange, a unit of account, a store of value, and a standard of deferred payment.

Detailed explanation-5: -Money’s property as a store of value facilitates a transfer of purchasing power over time. Another defining property of money is its use as a medium of exchange, which means that money is a carrier of a store of value between independent transactions.