Which of the Following Illustrates the Medium-Of-Exchange Function of Money

question 41

Multiple Choice

Which of the following illustrates the medium-of-exchange function of money?

• A) writing a check to buy a new Volkswagen
• B) noting that the price of a $20,000 Volkswagen is 16,000 euros
• C) keeping $20,000 in cash in your mattress instead of buying a new Volkswagen
• D) driving your $20,000 Volkswagen to a friend's house

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Definitions:

Barriers to Entry

Obstacles that make it difficult to enter a given market, potentially including high startup costs, strict regulations, or strong competition.

Few Firms

In markets characterized by few firms, also known as oligopolies, a small number of companies dominate the industry, leading to limited competition.

Prime Rate

The interest rate that banks charge their most creditworthy customers, often used as a benchmark in lending rates.

Covert Collusion

A secret agreement between firms to fix prices or divide the market to limit competition, which is illegal in many jurisdictions.