Which of the Following Illustrates the Store-Of-Value Function of Money

question 182

Multiple Choice

Which of the following illustrates the store-of-value 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) agreeing to repay a bank $400 a month for the next 48 months for a loan to buy a new Volkswagen
• D) keeping $20,000 in cash in your mattress instead of buying a new Volkswagen

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Definitions:

Economic Inefficiency

A situation where resources are not allocated optimally, leading to waste or an outcome where potential gains are not fully realized.

Production Possibilities Curve

A graphical representation that shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully employed.

Market Prices

The amounts at which goods and services can be bought or sold in open markets.

Resource Substitutability

The degree to which different inputs (or resources) can be substituted for one another in the production process.