In a less-developed economy, cattle is widely accepted as payment for goods and services. Nearly all goods and services are priced in terms of cattle; however, cows vary in quality, become less valuable with age, and are difficult to move over long distances. Which of the following functions of money do cattle provide? Select the two correct answers.(1 point)
Responses
store of value
store of value
portability
portability
medium of exchange
medium of exchange
unit of account
unit of account
uniformity
The two correct functions of money that cattle provide are:
1. Store of value: Cattle can be held and stored for future use or exchange. They retain value over time, although their value may decrease with age.
2. Medium of exchange: Cattle are widely accepted as a means of payment for goods and services in the economy. They can be exchanged for other goods or services.
The correct answers are:
1. Unit of account: Cattle is used as a common standard to measure and compare the value of different goods and services. It serves as a unit of measurement in terms of price.
2. Store of value: Cattle can be stored and preserved for later use. It holds value over time and can be exchanged for goods and services in the future.
Therefore, the functions of money that cattle provide are unit of account and store of value.
The two correct functions of money that cattle provide in this scenario are:
1. Store of value: Cattle can be stored and preserved for future use as a form of wealth. They hold value over time, allowing individuals to save and accumulate wealth in the form of cattle.
2. Medium of exchange: Cattle are widely accepted as payment for goods and services in the less-developed economy. They can be used to facilitate the exchange of goods and services, acting as a medium of exchange between parties.
Cattle do not provide the functions of money such as portability (as they are difficult to move over long distances), unit of account (as they vary in quality), and uniformity (as they may differ in terms of age and value).