Question

What are the three (3) functions of money? Group of answer choices Store of Portability, Unit of Stability, Medium of Scarcity Medium of Exchange, Store of Value, Unit of Account Medium of Exchange, Durability of Value, Stability of Account

Answer 1

1. Medium of exchange
2. Unit of account
3. Store of value

Step-by-step explanation:

1. Medium of exchange: money is useful as it is a common denominator of all goods. Because all goods can be valued in terms of money, it facilitates exchanges, working as a medium of exchange between different goods. This function is related to the ability of money of facilitate exchanges.
2. Unit of account: money allows to express the value of goods and services harmonizing the way they are denominated in an only unit. Then, thanks to money, we can compare the value of goods through their prices. This function is related to the ability of money of denominate all goods.
3. Store of value: money allows saving, because it is not perishable, as the majority of goods or services. This function is related to the ability of money of keep value from one time to other.