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Question : 12
Total: 18
Explain the 'unit of account' function of money. How has it solved the related problem created by barter?
Solution:
Money serves as a common medium or unit of value. Unit of account function of money means that money can be used for quoting prices or recording transactions. Money has provided a common yardstick to measure all these different units in a common denomination known as price. This removes the difficulty, of keeping accounts and makes possible the existence of financial institutions.
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