Question

What are the main functions of money?

Hint:

Money's main jobs are to be used for buying things (medium of exchange) and for pricing them (measure of value). It also lets us save for later and take out loans.

Answer 1

The main functions of money are traditionally divided into primary and secondary functions. Primary Functions:

Medium of Exchange: This is the most important function. Money acts as an intermediary in transactions, eliminating the need for a "double coincidence of wants" required in a barter system.
Measure of Value (or Unit of Account): Money provides a common standard for measuring the value of goods and services, making it possible to compare the value of different items and to keep accounts.
Secondary Functions:

Standard of Deferred Payments: Money serves as a standard for payments that are to be made in the future. This function makes borrowing and lending possible.
Store of Value: Money can be held as an asset and used to store wealth for future use. It is the most liquid of all assets, meaning it can be easily converted into other goods and services.