When money is acting as a store of value, it allows an individual to A. exchange goods for other goods and services in the economy. B. measure the value of goods and services in the economy. C. transfer dollars, and therefore purchasing power, into the future. D. trade money for goods and services in the economy. Money is an imperfect standard of deferred payment because ▼ dollars inflation velocity reserves causes the value of money to decrease over time.

Question

Corbin Haley

Business

3 June, 18:55

When money is acting as a store of value, it allows an individual to A. exchange goods for other goods and services in the economy. B. measure the value of goods and services in the economy. C. transfer dollars, and therefore purchasing power, into the future. D. trade money for goods and services in the economy. Money is an imperfect standard of deferred payment because ▼ dollars inflation velocity reserves causes the value of money to decrease over time.

+5

Answers (2)

Know the Answer?

Jeffrey · Answer 1

Answer: Transfer dollars, and therefore purchasing power, into the future.

Explanation:

Money has several functions, one of which is that money can be used as a store of value: this implies that money can be stored as a valuable and withdrawn whenever an individual wants to make use of it. An example of when acts as a store of value is when an individual saves money in the bank, with the aim of using the money sometime in the future.

Jayda Mack · Answer 2

C) transfer dollars, and therefore purchasing power, into the future.

Explanation:

Money has four basic functions:

unit of account store of value medium of exchange and finally standard of deferred payment

Money must be able to perform all 4 functions in order to be considered fiat money or currency money. In order to understand the importance of money being a store of value, you have to compare it to other forms of money that do not serve as a store of value.

For example, commodity money used in barter (e. g. animals, food or other goods) have a tendency to decay, malfunction or rot. If we had to use commodity money, we wouldn't be able to save any money, or our savings would be limited to very few objects.