# 1.1 Why We Need Money

1. Medium of Exchange: Money facilitates transactions by serving as a universally accepted medium of exchange, overcoming the limitations of barter systems.
2. Unit of Account: It provides a common measure for valuing goods and services, allowing for consistent pricing and economic planning.
3. Store of Value: Money preserves value over time, enabling savings and future consumption.
4. Standard of Deferred Payment: It allows for the settlement of debts and financial obligations over time.
5. Economic Coordination: Money helps in coordinating economic activity by reflecting the supply and demand for resources and labor.

Historical examples : Where changes in money systems significantly impacted economies (e.g., hyperinflation in Zimbabwe, the gold standard).

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