Introduction to Economics 2 Deneme Sınavı Sorusu #349700

Which of the following functions of money ensures to keep purchasing power on hand?

 


Unit of account

 

Barter economy

 

Store of value

 

Medium of exchange

Social transfer


Yanıt Açıklaması:

One of the functions of money is to be a store of value. Money, as a store of value, ensures to keep purchasing power on hand. For example, you hold an amount of purchasing power equal to the amount of money in your pocket right now. If you have 20 TL in your pocket, you can imagine your purchasing power by thinking about the goods and services you may purchase with this amount of money and understand this function of money easily. This function of money is closely related with the prices of goods and services in the country. For instance, if all prices double right now, the amount of goods and services you can purchase with the money in your pocket cut in half. In other words, your purchasing power with the money in your pocket halves. Contrary, if all prices of goods and services are lowered, then you can purchase more goods and services with the money in your pocket, meaning that your purchasing power increases.

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