Money's Most Important Function Is to Serve as a Medium

question 45

True/False

Money's most important function is to serve as a medium of exchange.

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Definitions:

Perfect Substitute

A perfect substitute is a good or service that can be used in exactly the same way as another, meaning consumers are indifferent between the two.

Utility Function

A mathematical representation that ranks individuals' preferences or satisfaction derived from consuming goods and services.

Utility Function

An economic model representing the preferences of an individual or entity over a set of goods and services by assigning a level of utility to each potential bundle of consumption.

Indifference Curve

A graph that shows a combination of two goods that give a consumer equal satisfaction and utility, demonstrating their preferences.