The Function of Money That Enables Individuals to Exchange Goods

question 24

Multiple Choice

The function of money that enables individuals to exchange goods and services in a common unit of account is called:

• A)medium of exchange.
• B)store of value.
• C)unit of account.
• D)measure of power.

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Definitions:

Principal

In finance, the original sum of money borrowed or invested, excluding any interest or dividends. In law, the primary party who authorizes another (the agent) to act on their behalf.

Installments

Payments divided over a period of time for a debt or purchase, rather than paying the total amount upfront.

Default

Failing to fulfill a legal obligation, such as not making a scheduled payment on a loan.

Negotiable Instrument

An official paper that promises the disbursement of a designated sum of money, which can be demanded at any time or paid at an agreed-upon moment, identifying the payer.