The view that the only function of money is to serve as a medium of exchange means
A) commodities are exchanged for commodities.
B) commodities are exchanged for money, then money is exchanged for other commodities.
C) money is exchanged for commodities, then these commodiites are exchanged for more money.
D) money is exchanged for money

Question

Quizplus · Accepted Answer

The view that the only function of money is to serve as a medium of exchange means that commodities are exchanged for money, and then money is used to purchase other commodities. This suggests that money serves as a means to facilitate trade and make transactions more efficient by providing a common medium of exchange. Option A is incorrect as it suggests that bartering is the only way to exchange goods and services. Option C is partially correct but does not fully capture the concept of money as a medium of exchange. Option D is incorrect as it suggests that money is exchanged for itself, which is not a valid transaction.

The View That the Only Function of Money Is to Serve