Question

During the late 1970s, prices quoted in terms of the Israeli currency, the shekel, rose so fast that grocery stores listed their prices in terms of the U.S. dollar and provided customers with dollar-shekel conversion tables that they updated daily. Although people continued to buy goods and services and make loans using shekels many Israeli citizens converted shekels to dollars to avoid a reduction in their wealth due to inflation. Thus, the U.S. dollar functioned as money in Israel during this period.

A. as a standard of deferred payment.
B. as a credit card.
C. as a medium of exchange.
D. as a unit of accounting.

Answer 1

D. As a unit of accounting

Step-by-step explanation:

The U.S. dollar functioned as money in Israel during this period as a unit of accounting.

Money can be defined as anything that is generally acceptable as a medium of exchange or form of payment

There are different functions of money which includes:

1. Medium of exchange

2. Store of value

3. Units of accounting

1. Medium of exchange. Money functions as a medium of exchange between buyers and sellers. Exchange of goods and services is made easy with the use of money.

2. Store of value: Money functions as a store of value. That is, money should remain valuable when stored for a period of time.

3. Unit of account: Money also functions as a unit of account, that is, providing a common measure of the value of goods and services being exchanged.