Which of the following describes the medium-of-exchange function of money?
A) noting that Audible.com sells downloadable audio books for $10 per book
B) making a monthly payment toward your car loan
C) paying $30 for a haircut
D) putting away $50 each month into your savings account

Question

Quizplus · Accepted Answer

The medium-of-exchange function of money refers to using money as a means to make transactions or purchase goods and services. Paying $30 for a haircut represents this function as money is being exchanged for a service. Option A is about the price of a product and does not involve transactional exchange. Option B involves paying off a loan, which is not a typical transaction for goods and services. Option D involves saving money, which does not involve a transaction at all.

Which of the Following Describes the Medium-Of-Exchange Function of Money