Question

Tim wants to purchase a new computer and go to the Caribbean for spring break. The computer is priced at $1,299, and the vacation is priced at $750. He has only $1,537 in his checking account, so he cannot afford to purchase both. After much thought, Tim buys the computer and writes a check for $1,299.

Identify what role money plays in each of the following parts of the story.

Answer 1

Tim can easily determine that the price of the computer is more than the price of the vacation = Unit of Account

Tim has $1,537 in his checking account = Store of value

Tim writes a check for $1,299 = Medium of Exchange