Question

People use money as a unit of account when they:_________

A. hold money to transfer purchasing power into the future.
B. use money as a measure of economic transactions.
C. use money to buy goods and services.
D. hold money to gain power and esteem.

Answer 1

B) use money as a measure of economic transactions.

Step-by-step explanation:

The four functions of money are:

1. unit of account: money serves as a common denominator to determine the relative value of goods and services
2. store of value: money is used as a store of value because it can be used to store purchasing power for future use
3. medium of exchange: money is used to buy and sell goods and services
4. standard of deferred payment: money can be used to lend and borrow, as well as charge interests on the loans