Suppose you need to buy a book. You have ₹50 in your pocket. You visit the bookshop in your neighbourhood where the shopkeeper tells you that the book is worth ₹100. What options do you have to buy the book today? Will you request the shopkeeper to allow you to make the rest of the payment later?
With ₹50 when the book costs ₹100, there are several options available to buy the book today.
(1) Request deferred payment: Ask the shopkeeper to allow you to pay ₹50 now and the remaining ₹50 later.
(2) Digital payment option: Ask if the shopkeeper accepts digital payments so your parents can transfer the remaining amount.
(3) Buy later: Purchase the book later after collecting the full amount.
(4) Borrow from others: Ask a friend or family member to lend you the remaining amount.
Requesting deferred payment is possible because money serves as a 'standard of deferred payment.' The shopkeeper may agree because money is trusted as a reliable medium that can be accepted for future payments.
This function of money enables credit transactions and installment payments in everyday commerce.
Explanation
The chapter introduces the concept on Page 9: 'The fact that money is accepted as a way of making deferred payments makes money a standard of deferred payment.' This means money enables people to make purchases on credit, paying part now and the rest later, because money is trusted to hold its value and be accepted in the future.
Solution Steps
With ₹50 when the book costs ₹100, multiple options are available
Option 1: Request deferred payment — pay ₹50 now and remaining ₹50 later
Option 2: Ask if shopkeeper accepts digital payments for parental transfer
Option 3: Buy the book later after collecting the full amount
Option 4: Ask a friend or family member to lend the remaining amount
Money serves as a 'standard of deferred payment'
Money is trusted as a reliable medium for future payments
This function enables credit transactions and installment payments