Question

Darnell has saved $30 per week to buy a new Blu-ray player. He compares two different models: a Panaview that is priced at $130 and a Zony model that is priced at $140. Darnell decides to purchase the Zony Blu-ray player for $140. Identify what role money plays in each of the following parts of the story.

a. Alex can easily determine that the Panaview model has a lower price than the Zony Model.
b. Alex saved $30 per week.
c. Alex pays $140 for the Blu-Ray player.

Answer 1

unit of account

store of value

medium of exchange

Step-by-step explanation:

Money is anything that is generally accepted as a means of payment for goods and services and for repayment of debt.

Functions of money

1. Medium of exchange : money can be used to exchange for goods and services. For example, money serves as a medium of exchange when you pay $140 for the Blu-Ray player.

2. Unit of account : money can be used to value goods and services, For example, you can determine that the value of the Panaview model is lower than the Zony Model based on its price

3. Store of value : money can retain its value over the long term, this it can be used as a store of value.