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In economics, the unit of account is a unit of measurement. The quality that it measures is market value.

Goods for sale in a market are priced using a unit of account. In this manner the value is measured by the seller and expressed to the buyer .

Contracts of credit or debt are denominated in a unit of account. In this manner the agreed value of the debt is measured, and the method of settling the debt is defined.

Whilst all market participants are free to use any unit of account that they prefer, most markets have only a few widely accepted units of account. For example in Japan the most universal unit of account is the yen.

Historically the unit of account function has been served by one of the following:

some fungible commodity or money
an agreement for serviceIn economics and marketing, a service is the non-material equivalent of a good. Service provision has been defined as an economic activity that does not result in ownership, and this is what differentiates it from providing physical goods. It is claimed t or labourIn classical economics and all micro-economics labour is one of three factors of production, the others being land and capital. It is a measure of the work done by human beings. There are macro-economic system theories which have created a concept called or free time/ leisureThere is also an album by Blur called Leisure''. Leisure time is time not spent on compulsory activities, like employment, education, running a business and household chores, or on regular sleeping. The distinction is not strict, since necessity can be la

Some examples from historyHistory is often used as a generic term for information about the past, such as in "geologic history of the Earth". When used as the name of a field of study, history refers to the study and interpretation of the record of human societies. The term histor include:

barrels of rumThis article is about the liqour. For the Scottish island called Rum (or Rhum), see Rum, Scotland Rum is a liquor made from sugar cane by-products such as molasses and sugar cane juice which are fermented and distilled. The distillate, a clear liquid, is
a fixed weightFor the 1994 album by the group Rollins Band, see Weight (album). Weight is the force exerted upon an object by virtue of its position in a gravitational field. In a constant gravitational field, such as the Earth's, this force is proportional to the obje of saltFor other meanings of the word salt see salt (disambiguation In chemistry, a salt is a composed of positively charged cations and negatively charged anions, so that the product is neutral and without a net charge. They are typically the product of a chemi
packets of cigarettes
a fixed weight of gold
a quantity of paper notes (eg dollar bills)
cows

It is generally assumed that a good unit of account is one that is stable. Just as a measuring stick used to measure length should itself be stable in length so to a unit of account used to measure value should itself be stable in value. However there are schools of economic thought that challenge this view point.

While it is most common to think of accounts in currency, it is possible to hold accounts in gold (as e-gold does) or options in various other commodities.

Value is ultimately a subjective quality so the value that a unit of account measures is in practice a market value. The point at which multiple subjective view points converge for the purposes of a free exchange of goods.

Inflation and deflation are the rise and fall, respectively, in the value of the unit of account.

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Topics: Unit Of Account Value Poor Units Gold Market Payment Stable...

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