For money to serve effectively as a measure of value,all items must be valued in terms of comparable units.Which of the following characteristics of money does this statement reflect?
A)Divisibility
B)Durability
C)Acceptability
D)Stability
E)Portability

Question

Quizplus · Accepted Answer

Divisibility is the characteristic of money that allows it to be divided into smaller units without losing its value. This is important for money to serve effectively as a measure of value because it allows all items to be valued in terms of comparable units. For example, if a loaf of bread costs $1 and a gallon of milk costs $2, then we can say that the loaf of bread is worth half as much as the gallon of milk. This is only possible because money is divisible into smaller units.

For Money to Serve Effectively as a Measure of Value,all