Funtions of money

Accounting
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what is meant by store of value

What does store of value mean and is physical coin or bill the best way to hold the value of your money over time

What about the impact of inflation to mention one concern with holding sums of money for a period of time

Nov 22nd, 2014

DEFINITION of 'Store Of Value'

Any form of commodity, asset, or money that has value and can be stored and retrieved over time. Possessing a store of value is an underlying basis for any economic system, as some medium is necessary for a store of value in order for individuals to engage in the exchange of goods and services. As long as a currency is relatively stable in its value, money (such as a dollar bill) is the most common and efficient store of value found in an economy.

Money is a store of value. If I work today and earn 25 dollars, I can hold on to the money before I spend it because it will hold its value until tomorrow, next week, or even next year. In fact, holding money is a more effective way of storing value than holding other items of value such as corn, which might rot. Although it is an efficient store of value, money is not a perfect store of value. Inflation slowly erodes the purchasing power of money over time.

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Nov 22nd, 2014

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Nov 22nd, 2014
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