Match the following:
| 1. | A unit of value | A. | Commonly accepted measure of value |
| 2. | A medium of exchange | B. | Savings done in terms of money |
| 3. | A standard of deferred payments | C. | Credit transactions |
| 4. | A store of value | D. | 1 pen = 3 pencils |
Answer & explanation
Correct answer: option 3
The correct answer is option 3: 1-D, 2-A, 3-C, 4-B
| 1. | A unit of value | D.1 pen = 3 pencils | |
| 2. | A medium of exchange | A.Commonly accepted measure of value | |
| 3. | A standard of deferred payments | C.Credit transactions | |
| 4. | A store of value | B.Savings done in terms of money | |
Here's why each option matches its definition:
- 1. A unit of value (D. 1 pen = 3 pencils): This refers to a common way to compare the value of different goods. In this case, we can express the value of a pen in terms of pencils.
- 2. A medium of exchange (A. Commonly accepted measure of value): This is something widely accepted for the payment of goods and services. Money serves this purpose because most people are willing to accept it.
- 3. A standard of deferred payments (C. Credit transactions): This refers to something that can be used to settle debts in the future. Credit transactions involve delayed payment, and the value of the good or service is measured in a common unit (money).
- A store of value (B. Savings done in terms of money): This is something that can hold its value over time. Money allows us to store our purchasing power for future use.