Money has several roles.Which role is the demand for money based on?
A) primarily on money's role as a store of wealth
B) primarily on money's role as a medium of exchange
C) primarily on money's role as a standard of value
D) primarily on money's role as an interest-bearing asset

Question

Money has several roles.Which role is the demand for money based on?  
A) primarily on money's role as a store of wealth 
B) primarily on money's role as a medium of exchange 
C) primarily on money's role as a standard of value 
D) primarily on money's role as an interest-bearing asset

Quizplus · Accepted Answer

The demand for money is primarily based on its role as a medium of exchange, meaning people hold money in order to facilitate transactions and purchases. While money can also function as a store of wealth and a standard of value, these roles are not the primary drivers of demand for money. Money is not typically an interest-bearing asset, as interest-bearing assets such as bonds and savings accounts are substitutes for money rather than part of its function.

Money Has Several Roles