What are functions of money? Select all that apply.
- Store of value
- Unit of account
- Medium of exchange
- Standard of deferred payment
The functions of money can include the following:
1. Medium of exchange: Money serves as a commonly accepted means of payment for goods, services, and debts. It facilitates the exchange of goods and services without the need for barter or direct trade.
2. Unit of account: Money provides a standard unit of measurement for comparing the value of different goods, services, and assets. It allows individuals to express the worth of various items in a common monetary unit.
3. Store of value: Money can be saved or stored for future use. It allows individuals to transfer purchasing power from the present to the future. In this function, money acts as a repository of wealth that can be used for later expenditure.
4. Standard of deferred payment: Money enables transactions to be conducted over time. It allows for the payment of debts and obligations in the future, providing flexibility in terms of timing and repaying borrowed funds.
5. Unit of value: Money assigns a specific value to each good or service. It enables comparability and facilitates price determination in the market economy.
So, the correct answer would be: Medium of exchange, Unit of account, Store of value, Standard of deferred payment, and Unit of value.