Final answer:
d) Durability
The life expectancy of a $20 bill reflects its durability, a key characteristic of money, alongside its role as a medium of exchange, store of value, and unit of account. The large amount of currency in circulation per capita suggests that much of the cash is held by entities other than individuals.
Step-by-step explanation:
The statement that the life expectancy of a $20 bill is estimated to be 7.7 years illustrates the characteristic of durability. Durability is one of the essential characteristics of money, ensuring that it can withstand physical wear and tear as it is used in daily transactions.
A printed US $100 bill acts as a medium of exchange, store of value, and unit of account, which are the three main functions of money. Because money is also portable and divisible, it can be easily carried and used in various denominations to facilitate trade.
Regarding the circulation of currency, the fact that the total amount of U.S. currency in circulation divided by the U.S. population is about $3,500 per person, but this is more than what most individuals carry, raises the question of where all the cash is.
This high per capita currency amount suggests that a significant portion of cash is not actively being carried by individuals but is likely held by businesses, banks, and financial institutions, or stored for various reasons such as savings or illicit activities.