Explain the ‘standard of deferred payment’ function of money. Explain the ‘unit of value’ and ‘medium of exchange’ functions of money.

1. Standard of deferred payment: Money helps to overcome the problem of deferred payment. The term deferred payment means future payment. Since the value of money is retained over a duration of time assuming the price is constant.

2. The medium of exchange: The primary function of money is to facilitate the transaction of money between the buyer and the second. The problem of wastage of time and resources is avoided. It helps to increase the allocation efficiency in the production of goods and services

c. Store of value: Money is an asset that retains its value over some time. People prefer to hold their wealth in the form of money because it has general acceptability. It promotes capital formation through new investments.