Which of these signifies the role of money in an economy?
A) It acts as a tool for poverty alleviation in the economy.
B) It serves as a medium of exchange in the economy.
C) It indicates the economic wellbeing of a nation.
D) It helps differentiate between the nominal and real income of a nation.
E) It is a clear indicator of the growth in national income.

Question

Quizplus · Accepted Answer

Money serves as a medium of exchange in the economy, facilitating transactions and allowing for the exchange of goods and services between individuals and businesses. While money may indirectly contribute to poverty alleviation and economic wellbeing, its primary role is to facilitate transactions. Money can also help differentiate between nominal and real income, and can be used as an indicator of national income growth, but these are secondary functions of money in the economy.

Which of These Signifies the Role of Money in an Economy