Question

Money's function as a medium of exchange means that

• A. money is a common denominators for expressing the value of goods and services.
• B. money can be sued to store wealth.
• C. money serves as an acceptable means of payment.
• D. money is a standard of deferred payment on exchange contracts extending into the future.

Answer 1

The correct option is C money serves as an acceptable means of payment.

Money helps to facilitate trade because people in the economy generally recognize it as valuable. Money is called the medium of exchange because money is a widely accepted token that can be used for exchange of any good or service.