Question
Explain the secondary functions of money.
✓
Answer
Secondary functions include the following:
(i) Standard of Deferred Payments: Deferred payments refer to those payments which are to be made in future.
Money is accepted as a standard of deferred payments because
(i) It possesses the quality of general acceptability.
(ii) Its value remains stable as compared to the values of commodities.
(iii) It is more durable as compared to other commodities.
(ii) Store of value: Store of value implies the shifting of purchasing power from the present to future. Because money is acceptable to all at any point of time, people can save (or store) a part of their current income for future use.
(i) Standard of Deferred Payments: Deferred payments refer to those payments which are to be made in future.
Money is accepted as a standard of deferred payments because
(i) It possesses the quality of general acceptability.
(ii) Its value remains stable as compared to the values of commodities.
(iii) It is more durable as compared to other commodities.
(ii) Store of value: Store of value implies the shifting of purchasing power from the present to future. Because money is acceptable to all at any point of time, people can save (or store) a part of their current income for future use.
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