Importance of Money & Role of money in functioning of an economy

Importance of Money; Role of money; Role of money in smooth functioning of an economy

Importance of Money:
Modern economy is a money economy where all exchanges take place through money. Satisfaction of human wants is possible with a help of money. The intensity of want and the attainment of utility can be measured easily with the help of money. All economic activities relating to production, distribution, consumption etc can be motivated by money. Savings and investments can be made in the form of capital information. Thus, money is important in the dynamic society for everything.

Role of money in smooth functioning of an economy:
Money helps in the smooth functioning of the economy in the following ways:

  • Introduction of money eliminates all the inconveniences of barter system.
  • It provides purchasing power, to buy goods and services and factors of production directly.
  • Remuneration to all factors of production can be made in terms of money.
  • By using money as a unit of accounts, debits and credits of transaction can be maintained in an economy.
  • The performance of the country can be measured in terms of money.
  • Money acts as a standard of deferred payment, so future transactions can be easily made.
  • National Income can be distributed in terms of money.
  • Trade and Commerce are facilitated by money.
  • It facilitates specialization and division of labor.
  • Savings and investment can be made in the form of money.

Related Articles

Influence Of Money - How It Controls Us

From my childhood I was always told to study hard and get good grades, to get a good job so that I could have a wonderful future as there will be no need to compromise. Our days start with buying a milk packet. When we open the newspaper we see headlines as 3G Spectrum or Satyam scam, or a person killing his own kin over property distribution. Read on further about influence of money and how money controls us.

Qualities needed to make money honestly

The importance of money in daily life, the problems created by the money and everything which should be known by everyone about money is described in this article. This article will help you to understand everything about money.

Money - most important part of our life

This article gives information about money. It tells how to earn money by good ways? This article gives few tips related to money. It tells how to consume money? It tells how to enjoy life with the help of money? It tells how to save money?

Whether the plastic money is an asset or a liability?

This article warns you of the dangers of plastic money, its advantages and disadvantages. The use of plastic money no matter has freed us from the bother of carrying cash but cautions are needed in its use. Carelessness in its case might land you in great troubles

Ways To Make Money With Your Website

These are the all the way from which you can make good income from your website. There are some more ways and I am studying about them and as soon as possible i will write them on And if you have any question about way to earn online then you can comment on this resource I will answer your question.

More articles: Money Money


No responses found. Be the first to comment...

  • Do not include your name, "with regards" etc in the comment. Write detailed comment, relevant to the topic.
  • No HTML formatting and links to other web sites are allowed.
  • This is a strictly moderated site. Absolutely no spam allowed.
  • Name: