Money is a universally accepted medium of exchange for goods and services. It has value because people are willing to accept it in exchange for something else. Therefore, money is an asset that people are willing to use to trade for other assets.

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Money Is

Question 40

Multiple Choice

Money is

A) an asset that people are willing to accept in exchange for goods and services.
B) a liability that people are willing to accept in exchange for goods and services.
C) the income one earns over a period of time.
D) one's assets net of one's liabilities at any point in time.
E) the bills and coins held by households.

Correct Answer: