Question

For the following cases, write the “use” of the money.

a. You purchase a shirt for $25 cash. _______________ and __________________

b. You put your paycheck in the bank

c. The BEA announces that the US GDP for 2010 was $14,526 billion

Answer 1

A》 Medium of exchange - it means that money act as a medium for the sale and purchse of goods and service ( t- shirts ) .

Measure of value or unit of value - money serves as measure of value in term of unit of account .Unit of account means that the value of each goods or services is measured in the monetary unit.

B》 standard of deferred paymets : deferred payments refers to those payment which are made sometimes in the future .

C》 tranfer of value - money also serves as a convenient mode of transfer of value .By facilitating transfer of value , money has promoted both consumption expenditure as well as investment expenditure acrosss all parts of the world