DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : Md. Qadeer Rehman
Designation : HEAD OF SECTION
Branch : D.C.C.P.
Institute : K D R Govt, Polytechnic,
Wanaparthy.
Year : I year
Subject : Business Organization
Subject code : CCP-104
Topic : Money

Duration : 50 mts
Sub topic : Functions of money
Teaching Aids : PPTs, animations
CCP104.138 1
Objectives
On completion of this you would be
able to:
 The function of money
 The characteristics of good form of
money
 The importance of money

CCP104.138 2
Recap:

The definition of money

 The evolution of money
 The various forms of money
 The various stages of development of money

CCP104.138 3
Functions of money

Prime functions Contingent functions

Medium of exchange A means of human satisfaction
Store value Helps to select important goods
Standard of deferred For consumption
payment for labour
Measure value Helps credit purchase system
Helps for division of labour
Helps for effective
implementation as a measure
CCP104.138 4
Prime Function of Money

1. Medium of exchange :

c) Money helps purchase and sale

d) Universally acceptable
e) It satisfies human wants

CCP104.138 5
Prime Function of Money
1. Storage value:

c) It may be stored for future needs

d) When stored its value may not be
reduced

CCP104.138 6
Prime Function of Money

1. Standard of deferred payment:

c) It helps to measure the debts

d) It may be paid in future

CCP104.138 7
Prime Function of Money

1. Measure value:

c) The value of articles can be measured

d) Compares market prices

CCP104.138 8
Contingent functions of money

 Money helps to purchase articles to satisfy

human wants
 It helps credit purchase system
 85% of business transactions are credit
purchase credit cards system developed
 It help the division of labour and payment for
efficiency of service

CCP104.138 9
Characteristics of good form of money
Division
Identity Gold, silver
it is to be other articles
recognized with Will be
divisible Stability
its value
The value may be
stable for debt,
credit
Characteris
Portability
tic of good Indestructible
It can be carried
form of Money never
with low cost
money Perishes

Homogeneity
uniformity in
quality malleability
Universal Acceptability Melting capacity
The money has been to give
adopted as a mode of Other shape
payment in the world
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Economic Activity Economic activity
consumption production

Economic activity
Exchange
Importance money

Economic activity EconomicActivity

Public finance Distribution

CCP104.138 11
Merits of Money

 Advantage to the customer

 Advantage to the producer
 Helps all the middle men to help reach the
goods to consumers
 Money facilities all trading activities
 Significance in public finance and public
debt
 Helps accounting and budget allocation for
growth of economy
 Creating employment

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 It strengthens
It helps the the capital
trade cycles market It encourages
fraud, theft
robbery

It creates Demerits of
money Over-
wants and capitalization
exploitation formation

It is root cause
In helps the of social evils
degradation of Lack of stability
morals in the economy

CCP104.138 13
Summary

we have discussed about :

 The function of money
 The characteristic of money
 The importance of money
 The merits of money

CCP104.138 14
Quiz

1.The functions of money are

c) Medium of exchange only

d) Store value and measure value
e) Standard of differed payment
f) All the above.

CCP104.138 15
 Contd..
Quiz

2.The following are not the

characteristics of money

a) Identification and portability

b) Divisibility and stability
c) Commodities are exchanged for
commodities
d) Malleability and indestructibility

CCP104.138 16
Frequently asked questions:

1. Describe any eight functions of money

2. Explain any six characteristics of good form of
money
3. Explain in four sentences
a) Merits of money
b) Store value of money
c) Measure value of money
d) Universal acceptability

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