A medium of exchange. Money is a means of payment because of its characteristic of acceptability. The advantage of this is that money facilitates expansion of trade.

A store of value. Money can be used to store wealth in form of liquid cash, instead of bulky assets. We issue money to serve characteristics of acceptability and scarcity.

A measure of value. Money is used to measure the relative values of different commodities, though the price of a commodity may not be the best expression of its value.

A unit of account. Money is also issued as a unit of account for different levels of wealth. It enables the computing of stock and future incomes in business, possible.

Standard of deferred payments. So long as money remains acceptable, and prices remain stable because its of scarcity, people are able to postpone payments to future dates. They are able to make long term contracts for delivery of goods. They can lend and borrow and acquire interest along with the interests expressed in monetary terms.

Money makes it possible for price mechanism to operate since it is used as a value determining the prices of commodities.

Money also facilitates unilateral transactions i.e. one Way payment for instance in the payment of taxes.

It enables the transfer of value and wealth from one person to another and from place to place, since it is readily acceptable and because of its storage of value.

Money is a liquid reserve that enables people to hold liquid reserve cash assets (liquidity preference) for transaction, speculative, precautionary and finance motives. These form part of working capital for business firms, industries and individuals.

Money further serves as a measure and distribution of national wealth. Goods and services, wages, profits, rent and interest are valued in monetary terms.

Finally, money serves as a tool that the government uses in the execution of its monetary policies for instance if government restricts credit, it may counteract inflationary tendencies.