Final answer:
The correct answer is option 1. Robert's house acted as a store of value during the time he owned it, appreciating in value from $300,000 to $400,000 over a period of five years.
Step-by-step explanation:
Robert bought a house for $300,000 in 2000 and sold it five years later for $400,000. During the time Robert owned the house, it served primarily as a store of value. A store of value is something that can be saved and retrieved in the future, potentially with its value intact or increased. In this case, Robert's house appreciated in value over the five years, indicating that it successfully stored value during that time.
Money and assets serve as a store of value when they can be saved and retrieved in the future with their value intact or, as with Robert's house, increased. A medium of exchange is a function of money where it is used to facilitate transactions, while a unit of account is a standard numerical unit of measurement of the market value of goods, services, and other transactions. The house does not serve as medium of exchange or unit of account because it's not used to purchase goods and services or to measure value in transactions. Instead, it stores Robert's money and appreciates over time, demonstrating the characteristic of a store of value.
It is important to recognize that while the house served as a store of value for Robert, it could also be considered an investment. Other examples, such as a printed US $100 bill, can serve all three functions of money: acting as a medium of exchange, a store of value, and a unit of account.