Question

4)

Answer 1

Answer:

I. The three (3) main functions of money in an economy are;

a. Medium of exchange.

b. Unit of account.

c. Store of value.

II. Liquidity is a characteristic of money.

Explanation:

In economics or financial accounting, money can be defined as any asset used by an individual or business entity to make purchases of goods and services at a specific period of time.

Simply stated, money refers to any asset which can be used to purchase goods and services by customers.

This ultimately implies that, money is any recognized economic unit that is generally accepted as a medium of exchange for goods and services, as well as repayment of debts such as loans, taxes across the world.

I. The three (3) main functions of money all over the world are;

a. Medium of exchange.

b. Unit of account.

c. Store of value.

II. The rate at which an asset can be used to purchase any goods or services refers to its liquidity. Thus, liquidity is a quality or characteristics of money as a medium of exchange.

In conclusion, money is a generally accepted medium of exchange around the world and money being a store of value makes it possible to transfer purchasing power between traders and buyers from the present to the future.