Question

tyler and his wife carefully budget funds each month and save 20% of their paycheques in a money market account so that they will have a down payment for a house within the next five years. which function of money does this illustrate?

Answer 1

Tyler and his wife demonstrate the use of money as a store of value by saving a portion of their income for a future house down payment, highlighting money's role in maintaining value over time for later use.

Step-by-step explanation:

Tyler and his wife's action of saving 20% of their paychecks in a money market account for a future house down payment illustrates the function of money as a store of value. Money, despite not being a perfect store of value due to inflation, remains a reliable method for maintaining value over time. This differs from other items, such as the shoes in the shoemaker example, which can depreciate or go out of style. Through their savings, Tyler and his wife are making use of money's ability to preserve purchasing power for future use, demonstrating a strategic approach to financial planning and the importance of budgeting.