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Store of value

Overview#

Store of value is the function of an asset that can be saved, retrieved and used for a Medium of exchange

Store of value is one of the three fundamental functions of money

Gold and other metals are good Store of values as their shelf lives are essentially perpetual, whereas a perishable good (e.g., milk) is a poor store of value due to its propensity to decay.
Interest-bearing assets, such as U.S. Treasury bonds (T-bonds), are very good stores of value because they generate interest income and their principal balances are backed by legal contracts.

Money is one of the best stores of value because of its liquidity, ability to be used as a Medium of exchange and that it is a recognized Unit of measurement.

More Information#

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