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Measurement of value of all goods and services refers to which of the following functions of money?
- a)Medium of Exchange
- b)Unit of account
- c)Standard of deferred payment
- d)Store of value
Correct answer is option 'B'. Can you explain this answer?
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Measurement of value of all goods and services refers to which of the ...
Before the use of money the price of all goods were difficult to remember as a result money was introduced as a unit of account which implied price system making it easy to remember and compare the prices of various goods and services. Thus one of the main function of money is to measure the value of goods and services and act as unit of account.
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Measurement of value of all goods and services refers to which of the ...
Unit of Account
The measurement of value of all goods and services refers to the function of money as a unit of account. This function of money allows for the standardization of prices for different goods and services, making it easier to compare the value of various products. Here's a breakdown of why this function is important:
- Standardization of Prices: Money serves as a common unit of account that helps in expressing the value of goods and services in a standardized manner. This enables individuals and businesses to easily compare prices and make informed decisions about their purchases.
- Facilitates Economic Transactions: By providing a common unit of account, money simplifies economic transactions and reduces the complexity of bartering. It allows for the efficient exchange of goods and services by providing a universally accepted measure of value.
- Financial Reporting: In the business world, money serves as the unit of account for financial reporting. Companies use monetary units to measure their assets, liabilities, revenues, and expenses, enabling stakeholders to assess the financial health and performance of the organization.
- Planning and Budgeting: Money as a unit of account is essential for individuals and businesses to plan and budget effectively. It allows for the calculation of costs, revenues, and profits in a consistent manner, aiding in decision-making and resource allocation.
In conclusion, the function of money as a unit of account plays a crucial role in the economy by providing a standardized measure of value for goods and services. It facilitates economic transactions, financial reporting, and planning, contributing to the efficiency and stability of the market.
The measurement of value of all goods and services refers to the function of money as a unit of account. This function of money allows for the standardization of prices for different goods and services, making it easier to compare the value of various products. Here's a breakdown of why this function is important:
- Standardization of Prices: Money serves as a common unit of account that helps in expressing the value of goods and services in a standardized manner. This enables individuals and businesses to easily compare prices and make informed decisions about their purchases.
- Facilitates Economic Transactions: By providing a common unit of account, money simplifies economic transactions and reduces the complexity of bartering. It allows for the efficient exchange of goods and services by providing a universally accepted measure of value.
- Financial Reporting: In the business world, money serves as the unit of account for financial reporting. Companies use monetary units to measure their assets, liabilities, revenues, and expenses, enabling stakeholders to assess the financial health and performance of the organization.
- Planning and Budgeting: Money as a unit of account is essential for individuals and businesses to plan and budget effectively. It allows for the calculation of costs, revenues, and profits in a consistent manner, aiding in decision-making and resource allocation.
In conclusion, the function of money as a unit of account plays a crucial role in the economy by providing a standardized measure of value for goods and services. It facilitates economic transactions, financial reporting, and planning, contributing to the efficiency and stability of the market.
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Measurement of value of all goods and services refers to which of the following functions of money?a)Medium of Exchangeb)Unit of accountc)Standard of deferred paymentd)Store of valueCorrect answer is option 'B'. Can you explain this answer?
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Measurement of value of all goods and services refers to which of the following functions of money?a)Medium of Exchangeb)Unit of accountc)Standard of deferred paymentd)Store of valueCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Measurement of value of all goods and services refers to which of the following functions of money?a)Medium of Exchangeb)Unit of accountc)Standard of deferred paymentd)Store of valueCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Measurement of value of all goods and services refers to which of the following functions of money?a)Medium of Exchangeb)Unit of accountc)Standard of deferred paymentd)Store of valueCorrect answer is option 'B'. Can you explain this answer?.
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