Which function of money allows prices of different goods to be compared easily?
Correct answer: B. Unit of account
- A. Medium of exchange
- B. Unit of account
- C. Store of value
- D. Standard of deferred payment
Explanation
As a unit of account, money provides a common measure in which prices and economic values are expressed. Its medium of exchange function concerns purchasing goods, while its store of value function concerns preserving purchasing power.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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