Question

hubert wants to both purchase a new laptop and go florida for spring break. the computer is priced at $1,299, and the vacation is priced at $750. he has only $1,537 in his checking account, so he cannot afford to purchase both. after much thought, hubert buys the laptop and writes a check for $1,299. identify what role money plays in each of the following parts of the story. hint: select each role only once. role of money medium of exchange unit of account store of value hubert can easily determine that the price of the laptop is more than the price of the vacation. hubert has $1,537 in his checking account. hubert writes a check for $1,299.

Answer 1

Money serves as a unit of account, helping Hubert compare the prices of a laptop and vacation; as a store of value, allowing him to save for these purchases; and as a medium of exchange when he pays for the laptop with a check.

Step-by-step explanation:

Hubert's decision-making process showcases the different roles money plays:

• Unit of account: Hubert can easily determine that the price of the laptop ($1,299) is more than the price of the vacation ($750) because money provides a common measure of value, which simplifies the comparison of the prices of both items.
• Store of value: Hubert has $1,537 in his checking account, which he has likely accumulated over time. As a store of value, money has allowed Hubert to save and keep value until he decided to use it for purchases such as his laptop.
• Medium of exchange: When Hubert writes a check for $1,299 for the laptop, money acts as a medium of exchange. It is an agreed-upon method for settling transactions, making trade easier compared to barter systems.