Distinguish between -

Primary functions of money and Secondary functions of money.

Open in App

Solution

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.

Suggest Corrections