Which of the following statements is true?
A) One of the limitations of using money is that it does not allow for the transfer of purchasing power into the future.
B) The necessary condition required for money to function as a medium of exchange is that it also needs to be a store of value.
C) The hours of labor that go into producing a product are a better unit of account than paper money.
D) When money is used as a yardstick to describe the price of various goods and services, it serves as a store of value.

Question

Quizplus · Accepted Answer

The necessary condition required for money to function as a medium of exchange is that it also needs to be a store of value. While money does have limitations, such as not transferring purchasing power into the future, it still needs to be a store of value in order to function properly as a medium of exchange. The hours of labor that go into producing a product may be a useful unit of account, but they are not a form of currency and do not necessarily function as money. When money is used as a unit of account to describe prices, it is not serving as a store of value, but rather as a medium of exchange and a unit of account.

Which of the Following Statements Is True