Question

Money acts as a means of calculating relative prices of goods & services (True/False).

• A. True
• B. False
• C. Can't Say
• D. None of the above

Answer 1

The correct option is A True

True.

Money refers to a common medium of exchange that is issued under the law of government and acts as a legal tender for the whole country. As a measure of value, money functions by determining the value of goods and services in the economy. Money is taken as the common denominator while calculating relative prices of all goods and services in the economy. Therefore, money acts as a means of calculating relative prices of goods & services.