Question

a $70 price tag on a sweater in a department store window is an example of money functioning as a multiple choice medium of exchange. unit of account. store of value. standard of deferred payments.

Answer 1

A $70 price tag on a sweater represents money's function as a unit of account, providing a standardized measure of value that simplifies transactions and comparisons of goods and services.

Step-by-step explanation:

The price tag of $70 on a sweater is an example of money functioning as a unit of account. This function of money facilitates transactions by assigning a specific value to goods and services, simplifying trade and exchange processes. Money acts as a common denominator, providing a method to measure and compare the value of different items, thereby making it easier to determine trade-offs. When you see a price tag on an item, it indicates the value of the item in monetary terms, allowing consumers to make informed decisions about their purchases based on the comparative value of their money.

While money does serve as a medium of exchange and a store of value, and it is necessary for the standard of deferred payments, the specific function illustrated by a price tag is being a unit of account. In this role, money standardizes the value of goods and services, enabling buyers and sellers to communicate prices and make transactions without the complications that barter systems entail.