The Unit of Account Function of Money

question 120

Multiple Choice

The unit of account function of money

• A) requires a double coincidence of wants.
• B) eliminates the need to value every item in terms of every other item.
• C) is the most important function of money.
• D) refers to the value of money over time.

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Definitions:

Perfectly Inelastic

Refers to a market situation where the quantity demanded or supplied does not change regardless of the price level changes.

Perfectly Elastic

Describes a market situation where quantity demanded or supplied changes by an infinite amount in response to any change in prices.

Demand

The willingness and ability of consumers to purchase goods and services at various prices.

Price Elasticity

A measure of the sensitivity of demand or supply to changes in price, indicating how the quantity demanded or supplied responds to price changes.