Which of the following best illustrates the medium of exchange function of money?
A)You keep some money hidden in your shoe.
B)You keep track of the value of your assets in terms of currency.
C)You pay for your oil change using currency.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

The medium of exchange function of money refers to its ability to be used as payment for goods and services. Choice C illustrates this function as paying for an oil change using currency involves exchanging money for a service. Choice A refers to the store of value function, while choice B refers to the unit of account function. Therefore, choice C is the best illustration of the medium of exchange function of money.

Which of the Following Best Illustrates the Medium of Exchange