When a Grocery Store Accepts Your $5 Bill in Exchange

question 220

Multiple Choice

When a grocery store accepts your $5 bill in exchange for bread and milk, the $5 bill serves as a

• A)medium of exchange.
• B)unit of account.
• C)store of value.
• D)standard of deferred payment.
• E)unit of barter.

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Definitions:

Quantity

The amount or number of a material or immaterial good that is considered as a unit or an aggregate.

Price Ceiling

A legal maximum price set by government on certain goods or services, intended to prevent prices from becoming too high.

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium for a good or a service is not achieved, leading to a misallocation of resources.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers at various price levels.