The question asks for the primary or most important function of money. To answer this, we need to understand the various functions of money and identify which one is fundamental to its existence and utility.
Correct Option: C) Medium of exchange
Money's primary function is to act as a medium of exchange. This means it is generally accepted by people in exchange for goods and services. Without this function, the other functions of money would not be possible or would be severely limited. It solves the problem of the "double coincidence of wants" inherent in a barter system, making trade efficient.
The question asks to identify the primary problem associated with the barter system. The barter system involves direct exchange of goods and services without the use of money. We need to analyze the fundamental difficulties inherent in such a system.
Correct Option: C) Double coincidence of wants is the primary problem of the barter system. It refers to the situation where two parties must simultaneously have what the other desires for an exchange to occur. This makes transactions very difficult and inefficient, as finding such a match can be time-consuming and often impossible.
The question asks about the specific function of money when it is used to express the value of goods and services in monetary terms. We need to identify which function of money aligns with this description.
Correct Option: B) Unit of account — This function of money allows for the valuation and comparison of goods, services, and assets by providing a common measure. When the value of all goods and services is expressed in monetary units (e.g., rupees, dollars), money is performing its role as a unit of account.
The question asks about the function of money that allows wealth to be preserved and used in the future. We need to identify which of the given options best describes this characteristic of money.
Correct Option: D) Store of value. Money serves as a store of value because it can be held and exchanged for goods and services at a later date. This allows individuals to save their earnings and transfer purchasing power from the present to the future, thereby carrying wealth forward.
The question asks to identify which option is NOT considered a function of money. We need to recall the primary functions that money performs in an economy and then evaluate each given option against these functions.
Correct Option: B) Maximisation of profit of banks — The maximization of profit is an objective of commercial banks and other financial institutions, which use money as their primary commodity. However, it is not considered one of the intrinsic functions of money itself in an economic system.
The question asks about the meaning of 'standard of deferred payment' as a function of money. This refers to one of the key functions that money performs in an economy.
Correct Option: B) Is used to express future or postponed payments such as loans and salaries