People Hold Money Even During Inflationary Episodes When Other Assets

question 2

Multiple Choice

People hold money even during inflationary episodes when other assets prove to be better stores of value. This can be explained by the fact that money is

• A)extremely liquid.
• B)a unique good for which there are no substitutes.
• C)the only thing accepted in economic exchange.
• D)backed by gold.

---

Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or a business cycle, whichever is longer.

Long-Term Liabilities

Obligations or debts a company is responsible for paying beyond one year from the date of the balance sheet.

Current Asset

Assets that are expected to be converted into cash, sold, or consumed within a year or within the operating cycle of the business, whichever is longer.

Current Liability

A company's debts or obligations that are due within one year, appearing on the company's balance sheet and including short-term borrowing, accounts payable, and other liabilities.