Question

When you deposit R1000 in cash into a savings account at a bank, what function of money is this action demonstrating?

A) Unit of Account
B) Store of Value
C) Medium of Exchange
D) Standard of Deferred Payment

Answer 1

Depositing R1000 in cash into a savings account demonstrates money's 'store of value' function, which allows preservation of economic value for future use.

Step-by-step explanation:

When you deposit R1000 in cash into a savings account at a bank, this action is demonstrating the store of value function of money. By placing the money in a savings account, you are preserving its economic value over time, allowing you to consume or spend in the future.

This is different from the medium of exchange function, which relates to buying and selling in the immediate present, or the unit of account function, which involves assigning a value to goods and services. The standard of deferred payment is relevant for purchases made on credit, which is not the situation when simply depositing money into a savings account.