Question

Complete the sentences with the correct function of money.

1. Norah walks into her favorite department store, Bullseye, to pick out a new dress. She checks out the price tag and is excited to see that the dress is on sale and is now relatively cheaper than another dress she was considering. Here, money is serving as ______________________.

2. She is especially excited because she has been saving money each week in her piggy bank at home so that she can afford a trip to Florida next summer. The money in the piggy bank is serving as ______________________.

3. She quickly walks to the checkout line where she pays the cashier for her new dress. At the cashier, money is serving as ______________________.

WORD BANK
a medium of exchange.
a unit of account.
barter.
a store of value.

Answer 1

Medium of exchange: Money act as a medium of exchange because it is accepted as a payment

Unit of account: Money act as a unit of account becuase it is used as a common denominator that can be used to express worth of any goods or services.

Store value: Money act as a store value. It means people can save money for use it in future.

Step-by-step explanation:

Money functions as a unit of account in that it provides a standard and widely accepted method for reporting the price of goods and services. Price tags are an example of money serving as a unit of account; by pricing items in U.S. dollars in the United States, consumers have a clear and universal method for determining the cost of a variety of goods and services.

Money also serves as a store of value, meaning people use money as savings to buy goods and services in the future. Norah is saving money at home for a vacation, so money is functioning as a store of value.

Money serves as a medium of exchange because it is widely accepted in transactions in the economy. Norah gives Bullseye money and receives the dress in exchange.