Money Lets You Measure the Relative Values of Goods and Services

question 28

Multiple Choice

Money lets you measure the relative values of goods and services. In so doing, money is performing which of the following functions?

• A) Store of value
• B) Medium of exchange
• C) Determination factor
• D) Monetary flagging
• E) Unit of account

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Definitions:

Simulation Analysis

A statistical method that involves running multiple scenarios of a model in order to estimate the probability of different outcomes.

Sensitivity Analysis

A financial modeling tool used to evaluate how different values of an independent variable affect a particular dependent variable under a given set of assumptions.

NPV

Net Present Value, a method used in capital budgeting to evaluate the profitability of an investment or project.

IRR

Internal Rate of Return, a financial metric used to estimate the profitability of potential investments.