Question

Many things have been used as money over time: cigarettes, gold, paper currency (like the U.S. dollar), etc. Describe the functions of money and consider the U.S. dollar as an example. Although the U.S. dollar has little or no intrinsic value, why do people want it so much? Can you think of other examples of things that act as “money” in our society? in detail  please type answer

Answer 1

Functions of money

Money is a matter of function four: a medium, a measure, a standard and store. According to Robertson, anything which is widely accepted in payments for goods or in discharge of other kinds of business obligations can be termed as money.

The primary functions of money are that it acts as a medium of exchange and it’s a measure of value. The secondary functions of money are that it acts as a standard of deferred payments, store of value and transfer of value. The contingent functions are: it assists production function, assists consumption decision, assists distribution of national income and assists the operation of a credit system.

People want US dollar

Due to the supply and demand factors, sentiment and market psychology and technical factors the value of US dollar gets affected. The US dollar appreciation and a modernization in Euro have amplified the strength of dollar. The US dollar makes up about 62% of the known Central banks which makes it the most popular currency .

Examples of things that act as money

Precious metals and gems – they are traditional source of portable wealth which could be easily served as money or currency.