ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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unit of account/standard of value
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medium of exchange
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store of value
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None of the above
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Detailed explanation-1: -A store of value is an asset that maintains its value, rather than depreciating. Gold and other precious metals are good stores of value because their shelf lives are essentially perpetual. A nation’s currency must be a reasonable store of value for its economy to function smoothly.
Detailed explanation-2: -Money as a store of value means that money is used as a widely accepted currency that holds its value over time. People can earn money, save it, and then spend it later on, knowing that the value has been stored over time.
Detailed explanation-3: -As a unit of account, money is used to express the value of goods and services. This function of money promotes economic efficiency and minimizes transaction costs by eliminating the need of expressing the price of each commodity in terms of every other commodity.
Detailed explanation-4: -Money as a Unit of Account Due to money’s use as a medium of exchange for buying and selling and as a value indicator for all kinds of goods and services, money can be used as a unit of account.