Question

Which of the following describe the purpose of money?

Select all that apply:

- Store of value
- Hard to transport
- Not durable
- Unit of account
- Medium of exchange

Answer 1

Options (1), (4) and (5)

Step-by-step explanation:

Money can be defined as an essential commodity without which life is difficult to run. It is comprised of a numeric value that marks the variation in the price of different objects (material). It is a unit of account and is considered to be a medium of exchange, as it is basically used to buy goods as well as services, in order to fulfill their wish. Anything we need to buy today requires a certain amount of money.

Thus, the correct answer is options (1), (4), and (5).

Answer 2

The purpose of money is that it is a store of value, unit of account and a medium of exchange.

Money is a store of value because it holds a value to pay for something else. Money is used to purchase items you want and depending on how much money you have it creates a value that is enough to purchase something else. Money is also a unit of account because it holds a numeric value that is important to the holder and the organizations so that people can spend their items on things they want/need. Money is also a medium of exchange because it is used as an exchange for a good or service that the consumer wants.