ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -Money as a Store of Value 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-3: -Economists differentiate among three different types of money: commodity money, fiat money, and bank money. Commodity money is a good whose value serves as the value of money. Gold coins are an example of commodity money. In most countries, commodity money has been replaced with fiat money.

Detailed explanation-4: -Answer and Explanation: The correct answer is b. Price mechanism. The price mechanism is not a function of money.

Detailed explanation-5: -Money serves several functions: a medium of exchange, a unit of account, a store of value, and a standard of deferred payment.