Question

As a measure of value money provides

• A. Its holder with perfect liquidity
• B. Its fixed return in future
• C. A common denominator for determining value of goods
• D. A mechanism for allocating resources and distributing output

Answer 1

The correct option is C A common denominator for determining value of goods

Money as a measure of value, helps in determining the value of goods and services in the economy. Money is taken as the common denominator while measuring the value of goods and services in the economy. Therefore, with the help of this function everything can be measure in a common denominator or unit.