When money is accepted as payment for a good or service, it is being used as a
A) medium of exchange.
B) store of value.
C) unit of account.
D) mechanism for transforming current purchases into future purchases.

Question

Quizplus · Accepted Answer

Money serves as a medium of exchange when it is accepted in exchange for goods or services, allowing for transactions to be conducted without the need for bartering. Option B is incorrect because although money can act as a store of value, it is not the primary purpose of money. Option C is incorrect because while money can be used as a unit of account to measure the value of goods and services, it does not necessarily have to be accepted as payment for them. Option D is incorrect because it does not accurately describe the function of money in the economy.

When Money Is Accepted as Payment for a Good or Service