Lara has earned $20 mowing grass around her neighborhood. She takes her money to the bookstore and purchases a CD for $11.99. She wants to buy a book as well, but she has to choose between the hardcover for $12 and the softcover for six dollars. Lara's use of her money and the decision she makes best illustrate which two functions of money? A. Measure of value and standardB. Medium of exchange and measure of valueC. Standard and store of valueD. Store of value and medium of exchange

Question

Jaylen Fleming

Business

8 June, 23:41

Lara has earned $20 mowing grass around her neighborhood. She takes her money to the bookstore and purchases a CD for $11.99. She wants to buy a book as well, but she has to choose between the hardcover for $12 and the softcover for six dollars. Lara's use of her money and the decision she makes best illustrate which two functions of money? A. Measure of value and standardB. Medium of exchange and measure of valueC. Standard and store of valueD. Store of value and medium of exchange

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Ethen Schneider · Answer 1

Answer: Medium of exchange and measure of value

Explanation: Medium of exchange refers to the ability of the money to be taken as a common medium for exchange of goods and services in the form of sale and purchase.

Whereas, measure of value refers to the ability by which different goods and services could be compared in terms of money.

In the given case, Laura purchased a CD using money and also is comparing two commodities in terms of money to purchase.

Hence we can conclude that the given case illustrates Medium of exchange and measure of value.