Question:
Money has following functions: A. Medium of Exchange, B. Unit of account, C. Store of value, D. Measure of Economic Uncertainty, E. Measure of Happiness.
Money has following functions: A. Medium of Exchange, B. Unit of account, C. Store of value, D. Measure of Economic Uncertainty, E. Measure of Happiness.
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Main functions of money are medium of exchange, unit of account and store of value.
Updated On: May 22, 2026
- A, B, C Only
- A, B, C, D Only
- A, C, D, E Only
- A, D, E Only
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The Correct Option is A
Solution and Explanation
Concept: Money performs several basic functions in an economy. The main functions are medium of exchange, unit of account, store of value and standard of deferred payment.
Step 1: Medium of exchange.
Money removes the difficulty of barter by acting as a medium of exchange. \[ A = \text{Correct} \]
Step 2: Unit of account.
Money is used to measure and compare the value of goods and services. \[ B = \text{Correct} \]
Step 3: Store of value.
Money can be saved and used in future. \[ C = \text{Correct} \]
Step 4: Reject incorrect functions.
Money is not a measure of economic uncertainty or happiness. \[ D, E = \text{Incorrect} \] Therefore, correct functions are: \[ A, B, C \]
Step 1: Medium of exchange.
Money removes the difficulty of barter by acting as a medium of exchange. \[ A = \text{Correct} \]
Step 2: Unit of account.
Money is used to measure and compare the value of goods and services. \[ B = \text{Correct} \]
Step 3: Store of value.
Money can be saved and used in future. \[ C = \text{Correct} \]
Step 4: Reject incorrect functions.
Money is not a measure of economic uncertainty or happiness. \[ D, E = \text{Incorrect} \] Therefore, correct functions are: \[ A, B, C \]
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