Money Serves as a Unit of Account,which Is Another Way

question 23

Multiple Choice

Money serves as a unit of account,which is another way of saying that money functions as

• A)a medium of exchange.
• B)standard of value.
• C)a store of value.
• D)standard of deferred payment.

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Definitions:

Opportunity Cost

The value of the best alternative foregone when making a decision.

Equity Capital

Funds raised by a company through the sale of stock in the company, representing ownership interests in the corporation.

Economic Profit

The total revenue of a business minus both its explicit costs (like wages and materials) and its implicit costs (like opportunity costs), reflecting the true financial gain.

Normal Profits

The minimum level of profit required for a company to remain competitive in the market, often considered the opportunity cost of capital.