What is ‘Barter’? Explain ‘standard of deferred payment’ function of money.
Solution:
Without the use of monetary devices like cash or credit cards, barter refers to the exchange of products and services between two or more parties. By definition, trading occurs when one party exchanges one item or service for another party's different good or service. A carpenter who constructs a fence for a farmer is an easy example of a bartering relationship.
‘standard of deferred payment’ function of money.
A little of lateral thinking about money's many functions is required to grasp the standard of postponed payment meaning.
The use of money as a medium of exchange and payment for obligations has become commonplace in modern society. All future financial commitments, including loans, investments, and contracts, are settled in terms of cash. It is to consider the value of money as a postponed payment standard right there. All forms of loan and borrowing rely on or are articulated in terms of monetary exchange, whether it interest, rent, salary, pension, insurance premium, etc.
Without the use of monetary devices like cash or credit cards, barter refers to the exchange of products and services between two or more parties. By definition, trading occurs when one party exchanges one item or service for another party's different good or service. A carpenter who constructs a fence for a farmer is an easy example of a bartering relationship.
‘standard of deferred payment’ function of money.
A little of lateral thinking about money's many functions is required to grasp the standard of postponed payment meaning.
The use of money as a medium of exchange and payment for obligations has become commonplace in modern society. All future financial commitments, including loans, investments, and contracts, are settled in terms of cash. It is to consider the value of money as a postponed payment standard right there. All forms of loan and borrowing rely on or are articulated in terms of monetary exchange, whether it interest, rent, salary, pension, insurance premium, etc.