Which of the following items serve as a unit of account?
I. $100 cash
II. checkable deposits
III. an original Picasso painting
IV. a $1,000 corporate bond that you own
A) I only
B) I and II
C) I, II, and III
D) I, II, and IV
E) I, II, III, and IV

Question

Quizplus · Accepted Answer

A unit of account is a standard measure used to value goods and services. Only items that are widely accepted as a measure of value can serve as a unit of account.

Cash and checkable deposits are widely accepted and commonly used to measure the value of goods and services. Therefore, I and II serve as units of account.

The original Picasso painting and $1,000 corporate bond that you own are not generally accepted as a measure of value of goods and services, and therefore they do not serve as units of account.

Which of the Following Items Serve as a Unit of Account