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Key Terms. Key Takeaway: the three functions of money. Money is just one of many types of assets. What makes money different from other assets is its ability to do more than just store value. Most importantly, for an asset to be considered money, it must be accepted as a form of payment.
Money serves three basic functions. By definition, it is a medium of exchange. It also serves as a unit of account and as a store of value—as the “mack” did in Lompoc. A Medium of Exchange. The exchange of goods and services in markets is among the most universal activities of human life.
Learning Objectives. By the end of this section, you will be able to: Explain the various functions of money. Contrast commodity money and fiat money. Money for the sake of money is not an end in itself. You cannot eat dollar bills or wear your bank account. Ultimately, the usefulness of money rests in exchanging it for goods or services.
May 4, 2024 · money, a commodity accepted by general consent as a medium of economic exchange. It is the medium in which prices and values are expressed; as currency, it circulates anonymously from person to person and country to country, thus facilitating trade, and it is the principal measure of wealth.
Money functions as a medium of exchange, allowing individuals to trade goods and services with one another. It also serves as a store of value, allowing people to save wealth over time. Lastly, it functions as a unit of value, enabling people to compare the worth of different items. Created by Grant Sanderson. Questions. Tips & Thanks.
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- Grant Sanderson
Jan 22, 2024 · Key Takeaways. Money is a medium of exchange; it allows people and businesses to obtain what they need to live and thrive. Bartering was one way that people exchanged...
Sep 30, 2023 · How Money Works. Money is a liquid asset used to facilitate transactions of value. It is used as a medium of exchange between individuals and entities. It's also a store of value and...
