The financial encyclopedia uses cookies to improve your user experience. Find out more here!




Unit of account


A standard monetary unit to measure the costs of goods and services. One of the roles of money is to be the unit in which contracts are expressed and individual incomes or firms’ profits are measured. High and fluctuating rates of inflation interfere with the performance of money as a unit of account, which is believed to be bad for the efficient and equitable running of the economy.

Reference: Oxford Press Dictonary of Economics, 5th edt.