As inflation rates increase, money becomes less useful as a
A) unit of account.
B) store of value.
C) medium of exchange.
D) double coincidence of wants.

Question

Quizplus · Accepted Answer

As inflation rates increase, the value of money decreases over time, making it a poor store of value. This means that holding onto money becomes less useful as a means of saving and investing, as its purchasing power diminishes. However, money still retains its other functions as a medium of exchange (used to buy goods and services) and a unit of account (used to measure the value of goods and services). Double coincidence of wants refers to the unlikely scenario where two parties need what the other has to offer, and is not related to inflation.

As Inflation Rates Increase, Money Becomes Less Useful as a