Question

A farmer sells a truckload of grain for $1000. He then takes the cash to the tractor dealer and buys a new set of tires for his cultivator. This illustrates that one function of money is to be a _____
A) medium of exchange.
B) measure of value.
C) store of value.
D) bartered item.

Answer 1

Answer:

Option (A) is correct.

Explanation:

Here, the function of money that is reflected in this example is a medium of exchange.

Money is used for purchasing goods and services between the parties.  

Money is mostly used as a medium of exchange. Nowadays, every individual uses money in almost every transactions because it is very convenient for the consumers and sellers of the product. Medium of exchange is a currency in which transactions takes place.