Question

The price of a bouquet of tulips in France is 4 euros. Jenna Algren, a frequent international traveler, found that a similar bouquet of tulips cost only 3 euros in Belgium. This demonstrates that the benefit of adopting the euro as a common currency is that it:________.

Answer 1

Answer:

serves as a unit of account

Explanation:

The four main functions of money are:

1. it serves as a unit of account: it provides a common measure of the value of goods and services being exchanged. Since the euro is used in most of Europe, you can determine that the bouquet is cheaper in Belgium than in France.
2. it serves as a store of value: money holds its value over time, so it serves as a store of value.
3. it serves as a medium of exchange: you can use money to purchase goods and services
4. it serves as a standard of deferred payment: money serves as a way of valuing a debt, so you can acquire goods now and pay for them later.