Which of the following options shows the function of money where it works as an asset and can be possessed for use in future?
Answer & explanation
Correct answer: option 3
The correct answer is Option 3: Store of Value
When money functions as a store of value, it means that it retains its value over time and can be saved or held to be used in the future. This characteristic allows individuals to possess money as an asset and use it later, preserving its purchasing power. The other functions of money are:
- A standard of deferred payments: This refers to money being used to settle transactions that will occur in the future.
- A unit of account: This means money provides a consistent measure to value and compare goods and services.
- A medium of exchange: This refers to money being used to facilitate transactions and purchases.