Question

Justify the following statements with valid arguments: Money serves as a ‘store of value’ in an economy. The Central Bank acts as ‘Government’s Bank’ in an economy. (a) Money serves as a ‘store of value’ in an economy.

Hint:

The ‘store of value’ function is critical for savings and investments in an economy.

Answer 1

Money's durability contrasts with the perishability of goods in barter, enabling future savings. It functions as a stable store of value, supporting long-term financial planning and investment.