Question

Explain the significance of the 'Standard of Deferred Payment' function of money.

Answer 1

Money as a standard of deferred payment means that the standard of pavment is contracted to be made at some future date. This is possible because value of money remains more or less constant and has the merit of general acceptability. This function of money has facilitated borrowing and lending activities. It has also led to the creation of financial institutions which are the lifelines of modern business.