Economists define money through four of their core functions. These functions will help us to understand the economy's importance and need for money. Say you've been to a shop and have started browsing. You can see the product price on display. All of them are expressed in terms of money (in this case groupies). The cake is one hundred rupees, the pencil is ten rupees, a thousand rupees are the sneakers, and so on. So, as you can see, in an economy, money is the basic unit of accounting or measuring everything. The ICSE Class 12 Economics Study Material can be found on the Extramarks website. The ICSE Class 12 Economics Study Material will be very useful in the studies of the students. Extramarks ICSE Class 12 Economics Study Material is prepared by the experts. The ICSE Class 12 Economics Study Material will make learning easier.
Having a uniform account unit in an economy is very important. In all cases, the barter system doesn't work. Having a uniform basis for all transactions, i.e. money, is therefore highly efficient and convenient. It is the basis of any economic transaction that takes place anywhere in the world. This is what most economists consider to be the money's most important function. Money has the ability to meet all your unlimited needs and desires. You want the cake, the pencil, sneakers, or all. The money is going to give you the ability to buy everything. Students will find the best study materials on the Extramarks website.
Money is liquidity, that is, it's the most liquid asset. It is the most convenient way to store wealth as you can use it directly to purchase any goods or products. No conversion is required. That's what we call money's store value. There is a risk if you were to store your wealth in other commodities, such as gold or shares. There is no stable value for these commodities. Money, however, does not fluctuate in value, it remains stable in value/worth. This is one of the greatest benefits of storing money or currency value.
Deferred payment is any future payment to be made. Like if you've borrowed or purchased goods on credit. These transactions must be paid in the future on a certain date. These amounts are therefore measured in money terms. And at the end of the day, they are also paid in money. This is because the value of money in any economy remains stable. And so one of the money's most important functions.