Functions of money

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  • Functions of money
    • Medium of exchange
      • Money is generally accepted as a means of payment for most goods
    • Unit of account (measure of value)
      • The price of an item can be measured in terms of how many units of currency it's worth
      • E.g. a low quality top costs US $10, a high quality one can cost US $100 +
    • Store of value
      • You can save money because it keeps its value
      • Saving enables use of money in the future
    • Standard for deferred payments
      • Borrowers are able to borrow money and pay it back at a future date


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