What are the three functions of money?
1. Medium of exchange: Money facilitates transactions and simplifies the process of buying and selling goods and services. Without money, individuals would need to engage in barter, exchanging goods or services directly, which can be inefficient and complex.
2. Unit of account: Money serves as a standard unit of measurement for the value of goods and services. It allows for easy comparison of prices and enables individuals to determine the relative worth of different items.
3. Store of value: Money allows individuals to store their wealth in a convenient and reliable form. By holding money, individuals can save and accumulate wealth over time, knowing that it will retain its value and can be used for future purchases.