When money serves as a common denominator for measuring the exchange rates among goods and services,it performs as a
A) medium of exchange.
B) store of value.
C) standard of value.
D) measure of fiat.
E) standard of intrinsic worth.

Question

Quizplus · Accepted Answer

Money serves as a standard of value when it is used to determine the worth or value of goods and services exchanged. It provides a commonly accepted unit of measurement for comparing the value of different goods and services. While money also functions as a medium of exchange and a store of value, these do not specifically relate to its role in measuring exchange rates among goods and services. Measure of fiat refers to the government's power to declare the value of money, and standard of intrinsic worth refers to the value of an item based on its inherent physical properties or characteristics, neither of which describes money's role in determining exchange rates.

When Money Serves as a Common Denominator for Measuring the Exchange