How to understand Functions of money？

The functions of money refer to the various roles that money plays in an economy. There are three main functions of money:

1. Medium of exchange: Money is used as a medium of exchange to facilitate transactions. It is a universally accepted means of payment for goods and services.

2. Unit of account: Money is used as a unit of account to measure the value of goods and services. It provides a standard for comparing the prices of different goods and services.

3. Store of value: Money is used as a store of value to save for future purchases. It allows individuals to defer consumption and save for future needs.

In addition to these three functions, money also serves as a standard of deferred payment, which allows individuals to enter into contracts that specify future payments in terms of money. Money also serves as a standard of value, which allows individuals to compare the value of different goods and services. Overall, the functions of money are essential for the functioning of a modern economy.