The Functions of Money Are to Serve as a

question 177

Multiple Choice

The functions of money are to serve as a

• A) resource allocator, method for accounting, and means of income distribution.
• B) unit of account, store of value, and medium of exchange.
• C) determinant of consumption, investment, and government spending.
• D) factor of production, exchange, and aggregate supply.

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Definitions:

Risk

The degree of uncertainty associated with the return on an investment, often linked to the potential for losing some or all of the original investment.

Total Return

Total return is the full return on an investment over a specific time period, including capital gains and dividends, expressed as a percentage of the initial investment cost.

Information Surprises

Events or news that were unexpected by market participants, often leading to sudden changes in asset prices.

Nondiversifiable Risk

The portion of investment risk that cannot be eliminated through diversification, attributed to market factors affecting all investments.