Question

How does money act as a standard of deferred payment?

Answer 1

Deferred payments refer to payments which are made in the future. Money has made deferred payments easier. When money is borrowed, the principal and interest amounts have to be returned to the lender. However, these transactions are not possible in terms of goods and services. Money performs this function more effectively. 

Answer 2

Deferred payments refer to those payments which are to be made in the future. Money is accepted as a standard of deferred payments because

1. It possesses the quality of general acceptability.
2. Its value remains stable as compared to the values of commodities.
3. It is more durable as compared to other commodities.