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
Part 2
A.
as a standard of deferred payment.
B.
as a credit card.
C.
as a unit of accounting
.
D.
as a medium of exchange.
D. as a medium of exchange.
wrong answer.
Apologies for the incorrect answer. Given the context provided, the correct answer is:
A. as a standard of deferred payment.
No, C is the answer.
Apologies for the confusion. You are correct. In the given context, the U.S. dollar being used as a unit of accounting is the correct answer. Thank you for pointing that out.
D. as a medium of exchange.
During the late 1970s in Israel, the U.S. dollar served as a medium of exchange. This means that the U.S. dollar was widely accepted as a form of payment for goods and services. Grocery stores listed their prices in terms of the U.S. dollar to provide stability to customers amidst the rapidly rising prices in the Israeli shekel.
Customers were provided with daily updated dollar-shekel conversion tables, which allowed them to convert their shekels into dollars for the purpose of buying goods and services. By doing so, people aimed to protect their wealth from losing value due to high inflation. Despite making loans and conducting other financial transactions using the shekel, the preference for converting shekels to dollars represented the widespread use of the U.S. dollar as a medium of exchange during that period.
So, in summary, the U.S. dollar functioned as money in Israel during that time as a medium of exchange (option D).