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:
“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)
“Let us stop being afraid. Of our own thoughts, our own minds. Of madness, our own or others. Stop being afraid of the mind itself, its astonishing functions and fandangos, its complications and simplifications, the wonderful operation of its machinerymore wonderful because it is not machinery at all or predictable.”
—Kate Millett (b. 1934)
“The English masses are lovable: they are kind, decent, tolerant, practical and not stupid. The tragedy is that there are too many of them, and that they are aimless, having outgrown the servile functions for which they were encouraged to multiply. One day these huge crowds will have to seize power because there will be nothing else for them to do, and yet they neither demand power nor are ready to make use of it; they will learn only to be bored in a new way.”
—Cyril Connolly (19031974)