The Unit-Of-Account Function of Money Means That Money Is Used

question 75

Multiple Choice

The unit-of-account function of money means that money is used

• A) as a consistent means of measuring the value of things.
• B) as the common denominator of future payments.
• C) to pay for goods and services.
• D) to accumulate purchasing power.

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Definitions:

Open-Market Purchases

The buying of government bonds by a central bank to inject money into the economy and expand economic activity.

Investment

The allocation of resources, usually money, in the expectation of generating an income or profit.

Real GDP

The measure of a country's economic output adjusted for price changes (inflation or deflation), representing the value of all goods and services produced over a specific period at constant prices.

Liquidity Preference Theory

Liquidity Preference Theory is a concept in Keynesian economics proposing that individuals prefer to hold their wealth in liquid form for convenience and security, influencing interest rates and economic activity.