ECONOMICS
FEDERAL RESERVE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Medium of Exchange
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Store of Value
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Unit of Account
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Acceptable
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Detailed explanation-1: -Money serves as a common medium or unit of account. As various goods and services are measurable in different units such as meter, litre and gram, it becomes difficult to measure them using a common unit. Money has provided a common yardstick to measure all these different units in a common denomination known as price.
Detailed explanation-2: -Money is considered a unit of account and is divisible, interchangeable and countable. Because money is countable, it can count on profits, losses, income, expenses, debt, and wealth. Buying candies is one example of using money like unit of account.
Detailed explanation-3: -Money serves several functions: a medium of exchange, a unit of account, a store of value, and a standard of deferred payment.
Detailed explanation-4: -ADVERTISEMENTS: Lastly, money acts as store of value. Money being the most liquid of all assets is a convenient form in which to store wealth, that is, money can be held as an asset. Thus store of value function is also called asset function of money.