Question

You pay for cheese and bread from the deli with currency. which function of money does this best illustrate? medium of exchange unit of account store of value liquidity

Answer 1

Answer:

Medium of Exchange

Explanation:

There are four functions of money are:  

1. As a Medium of Exchange  

2. As a Measure of Value  

3. As a Store of Value  

4. As a standard of Deferred Payment.

As a Medium of Exchange

Money as a medium of exchange has its most important role of facilitating the exchange of goods and services. Hitherto before the advent of money. Trade by Barter was the only means of conducting transactions. The use of money in the exchange of gods and services solved the major difficulty encountered with the barter system, which his "Double coincidence of wants".

Money by performing its most traditional role is accepted by all irrespective of whether they need each others good or services.

However to fulfill this role or function, Money has to be generally acceptable, portable, divisible, durable, stable in value and homogeneous.

Answer 2

Medium of exchange because it's the purchase that is in question here