#10 – The Three Functions of Money
In case you didn’t know – money has three primary purposes. It serves as a medium of exchange, measurement of value and store of value. When you use money as an intermediary in trade, it becomes a medium of exchange. As you already know, you can exchange money for many different goods and services.
Money also acts as a measurement of value. It is a basis for quoting prices of goods and services, and comparing the values of different objects. Finally, money can act as a store of value. This means you can safely store it, and when you retrieve it at later point in time, you will be able to use it as a medium of exchange.