Question

Define money. Explain the contingent functions of money.

Answer 1

Money is any good that is widely used and accepted in transactions involving the transfer of goods and services from one person to another.

Functions of money:

(i) Act as a medium of exchange.

(ii) Act as a legal tender for repayment of debt.

(iii) As a standard of value.

(iv) As a unit of accounting measure.

(v) As a means to save or store purchasing power.