Question

1) Because money eliminates the "double coincidence of wants" problem, the development of money as a ________ has facilitated the expansion of trade.

a) store of value

b) medium of exchange

c) unit of account

d) measure of value

2) Aster won $5,000 on a slot machine. She deposits her $5,000 winnings into a money market fund so that she can use the money next year to help her pay for a new boat. This is an example of money serving as a(n)

a) medium of exchange.

b) store of value.

c) unit of account.

d) investment good.

3) When you keep your savings under your mattress, you are using money as a(n)

a) store of value.

b) investment good.

c) medium of exchange.

d) unit of account.

4) When a seller on eBay posts a "Buy-It-Now" price on the Vespa scooter she is trying to sell, she is using money as a

a) unit of transfer.

b) medium of exchange.

c) store of value.

d) unit of account.

5) Target has 12-packs of Pepsi on sale and changes the price tag on the shelf from $6.00 to $2.99. This is an example of money serving as a(n)

a) store of value.

b) investment good.

c) medium of exchange.

d) unit of account.

Answer 1

1 b) medium of exchange.

2 D) investment good.

3 b) store of value.

4 d) unit of account.

5 d) unit of account.