ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Money serves as a medium of exchange, as a store of value, and as a unit of account.

Detailed explanation-2: -To summarize, money has taken many forms through the ages, but money consistently has three functions: store of value, unit of account, and medium of exchange.

Detailed explanation-3: -Money facilitates transactions of goods and services as a medium of exchange. Producers sell their goods to wholesalers in exchange of money. Wholesalers, in turn, sell their goods to the retailers and the retailers sell these goods to the consumers in exchange for money.

Detailed explanation-4: -Most forms of money are categorised as mediums of exchange, including commodity money, representative money, cryptocurrency, and most commonly fiat money. Representative and fiat money most widely exist in digital form as well as physical tokens, for example coins and notes.

Detailed explanation-5: -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.