Home/ Questions/Q 4001
Next
Answered
Jemshah
  • 0
Enlightened
Asked: 2023-01-21T09:55:00+00:00 In:

Outline five functions of money in an economy. (10 marks)November 2022

  • 0

Outline five functions of money in an economy. (10 marks)November 2022

You must login to add an answer.

Need An Account,

1 Answer

  1. Best Answer
    Enlightened
    1. Medium of exchange: Money serves as a medium of exchange, allowing individuals and businesses to buy and sell goods and services without the need for barter.
    2. Unit of account: Money serves as a unit of account, providing a common measure of the value of different goods and services.
    3. Store of value: Money serves as a store of value, allowing individuals and businesses to save and invest for future consumption or investment.
    4. Standard of deferred payment: Money serves as a standard of deferred payment, providing a means of settling debts over time.
    5. Facilitates specialization and trade: Money allows individuals and businesses to specialize in the production of certain goods or services and trade them for other goods or services.
    6. Facilitates economic stability: Money helps to stabilize the economy by providing a means of smoothing out fluctuations in production and consumption, and by providing a means of dealing with unexpected events.
    7. Facilitates financial intermediation: Money provides the basis for financial intermediation, allowing banks and other financial institutions to provide loans, mortgages, and other forms of credit.
    8. Facilitates price discovery: Money helps to facilitate price discovery by providing a common medium for determining the relative value of different goods and services.
    9. Facilitates monetary policy: Money provides the basis for monetary policy, allowing central banks to control the money supply and interest rates to stabilize the economy.
    10. Facilitates international trade: Money serves as a means of facilitating international trade by providing a common medium of exchange for different countries.
    • 0