Money serves as a store of value when it
A) rapidly gains and loses value over time.
B) loses a constant amount of value over time.
C) can be used to purchase approximately the same amount of goods over time.
D) encourages a double coincidence of wants.
E) is accepted by all merchants.

Question

Quizplus · Accepted Answer

A store of value is an asset that can be saved, retrieved, and exchanged at a later time, and be predictably useful when retrieved. Money that loses value over time is not a reliable store of value since it decreases in purchasing power. Money that increases and decreases in value rapidly is also not a reliable store of value since its value cannot be predicted. Money that can be used to purchase approximately the same amount of goods over time is a reliable store of value.

Money Serves as a Store of Value When It