Question:
"Mr. Sahotra borrowed funds from bank for purchasing a new house." From the above statement, identify the indicated function of money:
"Mr. Sahotra borrowed funds from bank for purchasing a new house." From the above statement, identify the indicated function of money:
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The "Standard of deferred payments" function of money allows for transactions where payments are made at a future date, such as loans.
Updated On: Feb 1, 2025
- Medium of exchange
- Store of value
- Unit of account
- Standard of deferred payments
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The Correct Option is D
Solution and Explanation
The function of money in this context is the Standard of deferred payments, as Mr. Sahotra is borrowing funds for a future purchase. Money is being used as a means to make payments over time rather than immediately, which is the essence of deferred payments.
Conclusion: In this case, money serves the function of deferred payments, allowing Mr. Sahotra to repay the loan over time for his house.
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