The four functions of money discussed in the video are:
This video explains the four main functions of money, which are essential for the BTEC Unit 3 Personal and Business Finance course. It details each function: unit of account, means of exchange, store of value, and legal tender, providing examples to illustrate their practical application.
Money functions as a "unit of account" by allowing us to easily compare the value of different items. The video uses the example of comparing two bottles of water: a 500ml bottle priced at 50p and a 2-liter bottle priced at 45p. Because money provides a common measure of value, we can instantly see that the 45p bottle is cheaper. The video further breaks this down to show the cost per 100ml for each bottle (10p for the 500ml and 2.25p for the 2-liter), demonstrating that the larger bottle is four times cheaper per unit of volume. This ability to assign a monetary value and compare prices is the essence of money as a unit of account.
