Question

Of money's three functions, the one that allows us to make intertemporal consumption choices is its...

Of money's three functions, the one that allows us to make intertemporal consumption choices is its function as a

A) medium of exchange                B) unit of account.           C) standard of deferred payment         D) store of value.

Homework Answers

Answer #1

Firstly let us have a brief idea that what is intertemporal consumption

It is basically the consumption which is going to appear in near future if today's consumption is not as much as desired and Vice a versa .

say for example ,for any person today's consumption and investment decide the future lifestyle for the standard living for that person.

In the similar fashion money act as a store of value for intertemporal consumption because as we all know that due to inflation, money loses its value.

today value of money will not be equal to the future value.

medium of exchange meaning currency can be used for exchange by other currencies around the world for buying goods and services.

Unit of account for money means it provide a unit value for exchanging of goods or services like the bartering system .

So the answer is option d

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