The three functions of money are: A) medium of exchange, store of value, and measure of liquidity B) conduit for international trade, store of value, and standard of value C) medium of exchange, store of value, and standard of value D) inflation hedge, measure of liquidity, and medium of exchange

Question

Quizplus · Accepted Answer

The three main functions of money are medium of exchange, store of value, and standard of value. Money allows for transactions to take place, can hold its value over time, and serves as a unit of measurement for the value of goods and services. Option A is close, but "measure of liquidity" is not a commonly recognized function of money. Option B is incorrect because while money can facilitate international trade, it is not its primary function. Option D is also incorrect as "inflation hedge" is not one of the primary functions of money.

the Three Functions of Money Are