Functions
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In the past, money was generally considered to have the following four main functions, which are summed up in a rhyme found in older economics textbooks: "Money is a matter of functions four, a medium, a measure, a standard, a store." That is, money functions as a medium of exchange, a unit of account, a standard of deferred payment, and a store of value. However, modern textbooks now list only three functions, that of medium of exchange, unit of account, and store of value, not considering a standard of deferred payment as a distinguished function, but rather subsuming it in the others.
There have been many historical disputes regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them all. One of these arguments is that the role of money as a medium of exchange is in conflict with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate. Others argue that storing of value is just deferral of the exchange, but does not diminish the fact that money is a medium of exchange that can be transported both across space and time. The term 'financial capital' is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender.
Read more about this topic: Money
Famous quotes containing the word functions:
“Adolescents, for all their self-involvement, are emerging from the self-centeredness of childhood. Their perception of other people has more depth. They are better equipped at appreciating others reasons for action, or the basis of others emotions. But this maturity functions in a piecemeal fashion. They show more understanding of their friends, but not of their teachers.”
—Terri Apter (20th century)
“One of the most highly valued functions of used parents these days is to be the villains of their childrens lives, the people the child blames for any shortcomings or disappointments. But if your identity comes from your parents failings, then you remain forever a member of the child generation, stuck and unable to move on to an adulthood in which you identify yourself in terms of what you do, not what has been done to you.”
—Frank Pittman (20th century)
“Mark the babe
Not long accustomed to this breathing world;
One that hath barely learned to shape a smile,
Though yet irrational of soul, to grasp
With tiny fingerto let fall a tear;
And, as the heavy cloud of sleep dissolves,
To stretch his limbs, bemocking, as might seem,
The outward functions of intelligent man.”
—William Wordsworth (17701850)