Question

How does money act as a measure of value?

Answer 1

The following are the 3 main functions of money :

1) It acts as the medium of exchange.

2) It is the measure of value.

3) It is a unit of account.

It can be said that money acts as a measure of value because different amounts of money have to be paid if you buy vegetables and precious metals like gold. Keeping both quantities same, their values are not same and different amounts of money have to be paid to buy them. So, by the amount of money you pay, you measure the value of the product.