Q. Money can perform which of the following function(s)?

1. Medium of exchange.
2. A convenient unit of account.
3. To act as a store of value for individuals

Select the correct answer from the codes given below:
Answer: All of the above
Notes: Money can perform all the enumerated functions. Money becomes an important instrument for facilitating economic exchanges. Economic exchanges without the mediation of money are referred to as barter exchanges. The first and foremost role of money is that it acts as a medium of exchange. Money also acts as a convenient unit of account. The value of all goods and services can be expressed in monetary units. When we say that the value of a certain wristwatch is Rs. 500 we mean that the wristwatch can be exchanged for 500 units of money, where a unit of money is rupee in this case. Money is not perishable and its storage costs are also considerably lower. It is also acceptable to anyone at any point of time. Thus, money can act as a store of value for individuals. Wealth can be stored in the form of money for future use.