A1 functions of money Flashcards
1
Q
Definition of unit of account ?
A
It allows us to place a monetary value (has money value) on goods and services.
- price = unit of account.
2
Q
Definition of means of account/exchange?
A
Allows us to trade.
- Buying + selling.
3
Q
Definition of store of value?
A
Allows us to use it in the future as it keeps it value.
• An assist (including money) to keep its purchasing power into the future, and be used at a later date.
4
Q
Definition of Legal tender?
A
It is a legally recognised form of payment.
- Money is widely recognised and used for all sorts of transactions.
5
Q
What are the functions of money?
A
- Unit of account
- Means of account/ exchange
- Store of value
- Legal tender
