Recall the four main functions of money and state any two of them.
Full Answer
Money has four main functions:
1. **Medium of exchange:** It is widely accepted as a form of payment for goods and services, eliminating the need for a barter system.
2. **Store of value:** It can be saved and used for future purchases, holding its value over time (assuming low inflation).
3. **Unit of account:** It provides a common measure of the value of goods and services, allowing for easy comparison.
4. **Standard of deferred payment:** It can be used to settle debts in the future.
Common mistakes
Giving characteristics of money (e.g., portable, divisible) instead of its functions.
Expert