Functions of Money - 1

What is the most important function of money?

• Store of wealth

• Medium of exchange

• Deferred payments

• Unit of production

What problem does money eliminate that was present in the barter system?

• Overproduction

• Price control

• Double coincidence of wants

• Inflation

Why is money considered a medium of exchange?

• Because it increases demand

• Because it is perishable

• Because it facilitates all transactions

• Because it is produced by banks

Which of the following statements is true?

• Money can directly satisfy human wants

• Money has intrinsic satisfaction value

• Money is used only in barter systems

• Money only buys goods and services

What allows purchases and sales to be conducted independently?

• Financial institutions

• Use of money

• Division of labor

• Barter exchange

What does money act as when expressing the value of goods and services?

• Capital investment

• Measure of value

• Medium of barter

• Inflation controller

In the United States, what is the unit of account?

• Dollar

• Euro

• Pound

• Yen

Why is money called a unit of account?

• Because it has no value

• Because it helps express value of goods

• Because it helps in measuring satisfaction

• Because it represents taxes

What does the price of a good in monetary terms represent?

• Its value as measured by money

• Consumer income

• Utility value

• Supply potential

What makes maintaining business accounts possible?

• Gold standard

• Goods in-kind

• Monetary measure of value

• Barter transactions