The three basic functions of money are
A)fiat,seigniorage,and debt.
B)a medium of exchange,a store of value,and a unit of account.
C)a standard of pay,a coincidence of wants,and a measure of the value of time.
D)demand deposits,other checkable deposits,and time deposits.

Question

Quizplus · Accepted Answer

The three basic functions of money are to serve as a medium of exchange, a store of value, and a unit of account. Money allows people to trade goods and services with each other, hold onto purchasing power, and measure the value of goods and services. Option A is incorrect because fiat money is a type of currency that is not backed by a physical commodity such as gold, seigniorage is the profit a government makes from printing money, and debt is a financial obligation that is owed. Option C is incorrect because "standard of pay" and "coincidence of wants" are not functions of money, and while time can be a factor in the value of money, it is not a primary function. Option D lists types of deposits but does not address the functions of money.

The Three Basic Functions of Money Are