Functions of Money

Money plays several roles in an economy. These roles are known as functions of money. The four key functions of money are:

1. Medium of Exchange: Money is used as a medium of exchange to buy goods and services. It makes transactions more convenient and efficient as it eliminates the need for barter system.

2. Measure of Value: Money serves as a measure of value as it provides a standard unit for measuring the worth of goods and services. This makes it easier for people to compare the values of different goods and services.

3. Standard of Deferred Payment: Money is used as a standard of deferred payment, which means that it allows people to buy goods and services on credit and pay for them later.

4. Store of Value: Money serves as a store of value as it can be saved and used at a later date. This function of money is important as it enables people to save for future needs and invest in assets.

The Correct Answer

The correct answer to the given question is option 'C', which states that money is a store of value. This is because money can be saved and used at a later date, which makes it a store of value. Money serves as a means of storing wealth, which can be used to meet future needs or make investments. The other options mentioned in the question, such as store of stocks and store of currency, are not functions of money.