The value of all goods and services can be expressed in monetary units.

This statement refers to which function of money?

Unit of Account

The correct answer is Option (1) → Unit of Account

The statement "The value of all goods and services can be expressed in monetary units" refers to the unit of account function of money. As a unit of account, money provides a common measure for the value of goods and services. This allows us to compare the prices of different goods and services and make informed decisions about what to buy and sell. In other words, money acts as a ruler to measure the relative value of different goods and services. Without a unit of account, it would be difficult to barter or exchange goods and services efficiently.

Here is the explanation for other options.

2. Medium of Exchange: As a Medium of Exchange, money facilitates transactions by eliminating the need for a coincidence of wants, which is necessary in a barter system. It is widely accepted in exchange for goods and services.When you buy groceries at a store, you use money (cash, credit, debit) to pay for them, simplifying the transaction compared to bartering goods or services.

3. Store of Value: Money functions as a Store of Value, meaning it can be saved and retrieved in the future, retaining its value over time (assuming stable economic conditions). This allows individuals and businesses to defer consumption and save for future expenses.Saving money in a bank account to buy a car next year demonstrates money's role as a Store of Value.

4. Standard of Deferred Payments: As a Standard of Deferred Payments, money is used to settle debts that are to be paid in the future. It provides a way to specify the terms of loans and other financial contracts in a stable and understandable manner.When you take out a loan to buy a house, the terms of repayment (amount, interest rate, duration) are expressed in monetary units, enabling clear and enforceable deferred payments.