Question

Average: 1 1. The roles of money Kerji wants to purchase a new computer and go to the Caribbean for spring break. The computer is priced at $1.299, and the vacation is priced at $800. He has only $1,574 in his checking account so he cannot afford to purchase both. After much thought. Kanji buys the computer and writes a check for $1.299. Identify what role money plays in each of the following parts of the story Hint: Select each role only once. Medium of Exchange Store of Value Role of Honey Kanji can easily determine that the price of the computer is more than the price of the vacation Kanji has $1.574 in his checking account. Yang writes a check for $1.299. Cadet Now Save Can

Answer 1

a) Kaenji can easily determine that the price of the computer is more than the price of the vacation. The prices of different goods and services are measured using money. Therefore, money acts as a unit of account.

Ans: Unit of account

b) Kenji has $1,574 in his checking account. The money in the checking account acts as a store of value which can be redeemed at any point in time.

Ans: Store of value

c) Kenji writes a check for $1,299. The check is used to purchase goods(or services) and hence money acts as a medium of exchange in this case.

Ans: medium of exchange