Money is differentiated from other assets due to
A) its value as a medium of exchange.
B) its value of facilitating government spending.
C) its value as a unit of account.
D) its invulnerability to inflation.
E) its value as smoothing out business cycles.

Question

Quizplus · Accepted Answer

Money is primarily valued for its function as a medium of exchange - in other words, it is widely accepted as payment for goods and services. While it may also serve as a unit of account and store of value (meaning people can use it to keep track of the value of their assets and savings over time), these functions are secondary to its role as a medium of exchange. Money is not invulnerable to inflation - in fact, inflation can erode its purchasing power over time. Similarly, while fiscal policy (government spending) can influence the overall economy, this is not a defining characteristic of money. Finally, while money can affect business cycles, this is also not a key characteristic that differentiates it from other assets.

Money Is Differentiated from Other Assets Due to