One of the Three Functions of Money Is to Serve

question 119

Multiple Choice

One of the three functions of money is to serve as a:

• A)financial asset.
• B)financial liability.
• C)real asset.
• D)real liability.

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Definitions:

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

Unit Costs of Production

The total expense incurred by a company to produce, store, and sell one unit of a particular product or service.

Diseconomies of Scale

The condition in which a firm’s costs per unit of output increase as the firm increases in size or scale of operation.