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In economics, economic value is a measure of the benefit provided by a good or service to an economic agent, and value for money represents an assessment of whether financial or other resources are being used effectively in order to secure such benefit.
Monetary economics is the branch of economics that studies the different theories of money: it provides a framework for analyzing money and considers its functions ( as medium of exchange, store of value, and unit of account), and it considers how money can gain acceptance purely because of its convenience as a public good. [1]
Many items have been used as commodity money such as naturally scarce precious metals, conch shells, barley, beads, etc., as well as many other things that are thought of as having value. Commodity money value comes from the commodity out of which it is made. The commodity itself constitutes the money, and the money is the commodity. [32]
In economics, nominal value refers to value measured in terms of absolute money amounts, whereas real value is considered and measured against the actual goods or services for which it can be exchanged at a given time. Real value takes into account inflation and the value of an asset in relation to its purchasing power.
Money is well-suited to storing value because of its purchasing power. [3] It is also useful because of its durability. [4] Because of its function as a store of value, large quantities of money are hoarded. [5] Money's usefulness as a store of value declines if there are significant changes in the general level of prices. [6]
Future value is the value of a sum of money, given a certain rate of growth, at a specific future date. For example, the amount you’ll have in five years after investing $1,000 in a savings ...
Sir Thomas Gresham. In economics, Gresham's law is a monetary principle stating that "bad money drives out good". For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable commodity will gradually disappear from circulation.
By 1947, when Abba Lerner wrote his article "Money as a Creature of the State", economists had largely abandoned the idea that the value of money was closely linked to gold. [25] Lerner said that responsibility for avoiding inflation and depressions lay with the state because of its ability to create or tax away money. [25]