Question

Which of the following is not a function of money?

• A. Medium of exchange
• B. Store of value
• C. Standard of deferred payment
• D. A hedge against inflation

Answer 1

Answer: (D)

A hedge against inflation

Money serves four basic functions:

1. It is a unit of account,

2. It is a store of value,

3. It is a medium of exchange and

4. It is a standard of deferred payment.

An inflation hedge is an investment that is considered to provide protection against the decreased purchasing power of a currency which results from the loss of its value due to rising prices (inflation).