3 Marks Each

Question

Discuss the function of money as a measure of value.

Vidyadip · Accepted Answer

Money as a measure of value:
Money plays an important role as a measure of value.

In Barter exchange system it became increasingly difficult to remember the exchange rates and values of each of the goods or services.
A person had to always remember how much goods or services he will get for $20 \ kg$ rice or how much cloth will he get for $1 \ kg$ ghee and so on.
This limitation was overcome by money. Money makes this problem easier by allowing the values of different goods or services to be compared and assessed against each other.
Money enables the working of the price-system. The price-system allows deciding the price of each goods and services and also makes it possible to compare the value of these goods and services with each other.
Money also allows faster decision-making and exchanges.

Answer