ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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In the product market, firms are willing to accept money as payment for their goods and services. In this example, money serves as
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a store of value
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a medium of exchange
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a unit of account
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a standard of value
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Explanation:
Detailed explanation-1: -Medium of exchange. Money’s most important function is as a medium of exchange to facilitate transactions. Without money, all transactions would have to be conducted by barter, which involves direct exchange of one good or service for another.
Detailed explanation-2: -Understanding Narrow Money The name is derived from the fact that M1/M0 are the narrowest or most restrictive forms of money that are the basis for the medium of exchange within an economy. This category of money is considered to be the most readily available for transactions and commerce.
Detailed explanation-3: -The exchange of goods in return for other goods or services is called Barter System.
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