1. What are the functions of money?
The functions of money are;
a. Money as an Exchange Medium
- money can be used for every transaction where goods or services are
purchased or sold.
b. Measure of Value
- money can be used in measuring the value of product, goods, or
services. Money is also accepted worldwide even if the currencies in each
country are different.
c. Standard of Deferred Payments
- money is needed to be paid by individuals, example is when someone
borrowed a money from a bank, they need to repay it with interest.
d. Transfer of value
- money can be used to purchase goods not only in the country but
beyond, like exchanging of goods or exchanging currencies internationally.
e. Store of Value
- money revolves around, so money must be reliably saved, stored, and
retrieved. Value of money must remain stable over time.
2. What are the characteristics of good money?
The characteristics of good money are; first, identifiable. People
should know that when receiving or paying a money, it will be easily
identifiable. Second transferable, since money is the medium of exchange, it
must be transferable to others. Next is durable, money is delicate so it must
survive while travelling or sort of accidents. Next is divisible, money must
have different values so it can be divisible to small units in able to be
exchanged for low-value goods, products, or services. Next is dense, money
need to be relatively dense I value so that it can be useful for purchases.
There are many more characteristics that a good money should have.
The functions of money are;
a. Money as an Exchange Medium
- money can be used for every transaction where goods or services are
purchased or sold.
b. Measure of Value
- money can be used in measuring the value of product, goods, or
services. Money is also accepted worldwide even if the currencies in each
country are different.
c. Standard of Deferred Payments
- money is needed to be paid by individuals, example is when someone
borrowed a money from a bank, they need to repay it with interest.
d. Transfer of value
- money can be used to purchase goods not only in the country but
beyond, like exchanging of goods or exchanging currencies internationally.
e. Store of Value
- money revolves around, so money must be reliably saved, stored, and
retrieved. Value of money must remain stable over time.
2. What are the characteristics of good money?
The characteristics of good money are; first, identifiable. People
should know that when receiving or paying a money, it will be easily
identifiable. Second transferable, since money is the medium of exchange, it
must be transferable to others. Next is durable, money is delicate so it must
survive while travelling or sort of accidents. Next is divisible, money must
have different values so it can be divisible to small units in able to be
exchanged for low-value goods, products, or services. Next is dense, money
need to be relatively dense I value so that it can be useful for purchases.
There are many more characteristics that a good money should have.
