Which of the following are the functions of money?A. Intermediary bet…

The correct answer is Option (2) → A, B and C only

Money saves us the trouble of barter, and in doing so it does several jobs, its functions: it is a medium of exchange, a unit of account, a store of value and the standard for payments due in the future. Statements A, B and C each describe one of these jobs; D describes a way of using money, not a function of money.

A. Intermediary between the buyer and the seller. True. This is money as a medium of exchange, its first and foremost role. The buyer hands money to the seller, and the seller uses it to buy whatever is needed from someone else, so nobody has to search for a person who wants the very goods on offer.

B. Expressing goods in monetary units. True. This is money as a unit of account. The value of every good and service can be stated as a price in rupees, and the relative worth of any two goods follows at once from their prices.

C. Helps in deferred payments. True. This is money as the standard of deferred payments. Payments that fall due later, such as the repayment of a loan, rent or salaries, are fixed and settled in money, because money is accepted by everyone and its value stays fairly stable over time. The same stability lets money act as a store of value.

D. Helps in making a cashless society. False. A cashless society is one in which transactions take place through the transfer of digital information instead of bank notes and coins. It describes the form in which money changes hands, not a function that money performs; money does the same jobs whether it is held as cash or as a bank balance.

Note: The NCERT book names three functions of money: medium of exchange, unit of account and store of value. The standard of deferred payments is not there in the book, but it is a recognised function of money, as explained above.