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What Are The Three Basic Functions Of Money

? Describe how rapid inflation can undermine money's ability to perform each of the three functions.
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Money serves as a medium of exchange, a unit of account, and a store of value. If inflation occurs, money as a medium of exchange will begin to lose its value as people recognize that the good they receive in exchange for money is decreasing in quantity or quality. As a unit of account, during inflation, prices will no longer accurately represent a good's value. Lastly, money as a store of value will decrease during inflation because the supply of money will have increased, and it will take more money to buy a good or service.

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