Answer :

Store of Value


People keep their wealth in the form of money because money is the most liquid form of wealth. Savings in the form of money is maintained for purchasing commodities in the future. In this case, the values of commodities are being stored. Therefore, money acts as a store of value. But the store of value is completely absent under the barter system. Wealth is stored in terms of goods as there was no money in existence. There were many problems such as storage of goods cost, loss of value and movement of transfer. Thus , it is not practically possible to store people’s purchasing power.


Money facilitates exchange beyond limits. Here, the store of value function does not create value loss over a period of time.


OR


Measure of Value


It is the monetary expression of the market value of goods and services. These goods are measured in terms of gram, litre and metre. This common unit of measurement enables the buyer and seller to compare the value of goods in the market. This enhances the activities of buying and selling in the market.


The common device to measure goods is completely absent under the barter system. The sale and purchase of goods occur at the same time. Their sale and purchase values also remain equal at that point. After existence of money, a person can purchase or sell goods with cash at any point of time. Thus, the act of purchase and sale has been separated.


The introduction of money resulted in the end of the barter system where the value of goods are measured in terms of money and are hence progressed with market activities.


Rate this question :

How useful is this solution?
We strive to provide quality solutions. Please rate us to serve you better.
Try our Mini CourseMaster Important Topics in 7 DaysLearn from IITians, NITians, Doctors & Academic Experts
Dedicated counsellor for each student
24X7 Doubt Resolution
Daily Report Card
Detailed Performance Evaluation
caricature
view all courses
RELATED QUESTIONS :

Explain how 'ReveEconomics - Board Papers

Explain the role Economics - Board Papers

Explain howEconomics - Board Papers

Explain theEconomics - Board Papers