The value of money indicates purchasing power of money. It refers to the quality of goods and services that a unit of money can purchase unit of time. The purchasing power of money depends on the level of price of goods and services. Thus, it refers the buying and purchasing power of money. There is inverse relationship between the value of money and the price level. If price is high purchasing power of money is low. Similarly if price is low the purchasing power is high. There is positive relationship between value of money and its purchasing power. Higher the value of money, lower will be the purchasing power. Similarly, lower the value of money, lower will be the purchasing power. The relationship between the value of money and its purchasing power is exactly proportional. Thus, in consumption, the value of money refers to the money to command or buy the goods and services.
According to Benham, “The value of money means the purchasing power of a unit of currency in general.”
In the word of Crowther, “The value of money is that what it mill buy”
Fisher define the value of money a “The purchasing power of money is the reciprocal of the level of prices”
According to Benham, “The value of money means the purchasing power of a unit of currency in general.”
In the word of Crowther, “The value of money is that what it mill buy”
Fisher define the value of money a “The purchasing power of money is the reciprocal of the level of prices”
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