Question

Distinguish between -

Primary functions of money and Secondary functions of money.

Answer 1

Basis of difference	Primary functions of money	Secondary functions of money
1. Definition	Primary functions of money are those functions for which it was developed.	Secondary functions of money are those functions that money performs besides its primary functions.
2. Functions	Primary functions of money are medium of exchange and measure of value.	Secondary functions of money are standard of deferred payment, store of value and transfer of value.
3. Solves problem of	These functions solve the problem of double coincidence of wants.	These functions solve the problem related to borrowing and lending.
4. Leads to	It leads to increase in trade operations in the society.	It leads to increase in credit creation and evolution of financial institutions.