Question

Doug is saving money in order to purchase a new snowboard next winter. This represents using money as

A) A medium of exchange.
B) A store of value.
C) A unit of account.
D) A medium of deferred payment.

Answer 1

Doug is using money as a store of value by saving it for a future purchase highlighting money's role in retaining value over time.

Step-by-step explanation:

When Doug is saving money to purchase a new snowboard next winter, he is using money as a store of value. This function of money allows it to retain its value over time enabling individuals to save and spend it in the future. Unlike goods in a barter system which might lose value or go out of fashion money provides the flexibility to store purchasing power. While money can lose some buying power due to inflation it is still recognized as widely accepted way to preserve wealth.