Money is a measure ofa)Valueb)Currencyc)Transferd)All of theseCorrect answer is option 'A'. Can you explain this answer?

Question

Answer

Money serves four basic functions: it is a unit of account, it's a store of value, it is a medium of exchange and finally, it is a standard of deferred payment.We consider money as a measure of currency.

Answer

Answer

★It is measured as currency plus deposits of banks and other institutions at the central bank.★

Answer

Option A

Answer

Money is a measure of currency:

Currency refers to a system of money in general use in a particular country. Money is a measure of currency because it serves as a medium of exchange, store of value, and unit of account. It is the most widely accepted form of currency in an economy and is used to facilitate trade and economic transactions.

Medium of exchange:

Money acts as a medium of exchange, which means it is accepted as a form of payment for goods and services. It eliminates the need for barter, where goods are exchanged directly for other goods. With money, individuals can easily exchange their goods or services for money and then use that money to purchase other goods or services. This facilitates trade and makes transactions more efficient.

Store of value:

Money is also a store of value, which means it can be saved and used in the future. Unlike perishable goods, money can be stored for long periods without losing its value. People can save money for emergencies, investments, or future expenses. Money's store of value function allows individuals to accumulate wealth and plan for the future.

Unit of account:

Money serves as a unit of account, providing a common measure of the value of goods and services. It allows individuals to compare and determine the relative worth of different goods and services. Money acts as a standard unit of measurement, making economic calculations and financial transactions more convenient and accurate.

Conclusion:

In conclusion, money is a measure of currency because it is a medium of exchange, a store of value, and a unit of account. It facilitates economic transactions, enables individuals to save and accumulate wealth, and provides a common measure for valuing goods and services. Money plays a crucial role in the functioning of an economy, making it an essential aspect of any financial system.

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