5 Questions
What function of money enables transactions to be settled at a later date, supporting credit and debt?
Store of Value
Which function of money ensures that all units of the same denomination are interchangeable, ensuring equal value?
Fungibility
What characteristic of money enables it to be divided into smaller units for precise pricing?
Divisibility
Which function of money provides a standard measure for expressing the value of goods and services?
Unit of Account
What function of money is recognized by governments as an acceptable form of payment for goods, services, and debts?
Legal Tender
Study Notes
Functions of Money
- The function of money that enables transactions to be settled at a later date, supporting credit and debt, is Credit.
- The function that ensures all units of the same denomination are interchangeable, ensuring equal value, is Standard Unit of Account.
- The characteristic of money that enables it to be divided into smaller units for precise pricing is Divisibility.
- The function that provides a standard measure for expressing the value of goods and services is Unit of Account.
- The function recognized by governments as an acceptable form of payment for goods, services, and debts is Medium of Exchange.
Test your knowledge of the functions of money with this quiz. Explore the key roles of money as a medium of exchange, unit of account, store of value, and standard of deferred payment. Sharpen your understanding of how money serves these crucial functions in the economy.
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