Question

Which one of the following is included in the primary function of money?

• A. Medium of exchange
• B. Measure of value
• C. Both (A) and (B)
• D. Store of value

Hint:

Remember, the two PRIMARY jobs of money are to act as a go-between in trades (medium of exchange) and to be the yardstick for prices (measure of value).

Answer 1

The Correct Option is C

The functions of money are typically categorized into primary and secondary functions.

Primary Functions: These are the most fundamental functions that money must perform to be considered money.

Medium of Exchange: Money facilitates transactions by eliminating the need for a double coincidence of wants.
Measure of Value (or Unit of Account): Money provides a common denominator to express the value of goods and services, making comparisons and accounting possible.

Secondary Functions: These functions, like "Store of Value" and "Standard of Deferred Payment," are derived from the primary functions.
Since both medium of exchange and measure of value are primary functions, the correct answer is (C).