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What Is Money? Explain the Three Functions That Money Performs

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Essay

What is money? Explain the three functions that money performs. Which one is the primary function of money?


Definitions:

Profit-maximizing Rule

The principle that firms maximize their profits by producing at a level where marginal costs equal marginal revenues.

Marginal Revenue

The increased earnings a business obtains from the sale of one extra item or service.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a product.

Output

The quantity of goods or services produced in a given time period by a firm, industry, or country.

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