Distinguish between -
Primary functions of money and Secondary functions of money.
Basis of difference
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Primary functions of money
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Secondary functions of money
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1. Definition
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Primary functions of money are those functions for which it was developed.
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Secondary functions of money are those functions that money performs besides its primary functions.
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2. Functions
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Primary functions of money are medium of exchange and measure of value.
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Secondary functions of money are the standard of deferred payment, store of value and transfer of value.
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3. Solves problem of
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These functions solve the problem of double coincidence of wants.
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These functions solve the problem related to borrowing and lending.
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4. Leads to
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It leads to increase in trade operations in the society.
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It leads to an increase in credit creation and evolution of financial institutions.
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