The economy is about "the production, distribution, and consumption of goods and services" also along with money.
The key components of the economy are:
- Production.
- Distribution
- Consumption.
These three elements drive the flow of money within an economy. Let's see:
- The goods are produced as per the needs and demands of the people where people work to earn wages, salaries, profit, etc.
- This stage is followed by <u>the distribution of these goods across different regions</u> and areas.
- Lastly, these goods are purchased by their final users for consumption and their income earned from firms return to them again(circular flow of income).
Therefore, <u>option B</u> states a true claim about the elements of an economy.
Learn more about 'Economy' here: brainly.com/question/2421251
Answer:
<h2>The function of money as <u>medium of exchange</u> is most closely related to the overall demand for monetary transaction.</h2>
Explanation:
- The transaction demand for money basically reflects the overall demand for monetary transactions in the economy which is essentially determined by the respective demands for goods and services and how many times they are commercially exchanged or traded in various markets in the economy.
- Therefore, the higher the commercial flow or movement of goods and services in the economy, the higher will be the demand for money in the economy.
- Now,one of the important functions of money is medium of exchange meaning that it is practically accepted as an universal medium of exchange for buying and selling any product or service in any economy or country across the world.
- Since, money is the only acceptable unit or medium of exchange for any commercial transaction or exchange, the demand for monetary transaction is also practically related to the money being used as unit or medium of exchange.
Jeff's financial needs are quite simple. He only wants to open a basic savings account. Let's look at the first three options:
a) Financial Services Company
b) Commercial Bank
c)Insurance Company
d) Trust Company
A Financial Services Company will often offer services such as financial advising and will even manage your funds for you, investing them based on your investment goals. This is a bit more than Jeff needs, and will likely involve heavier fees.
B) A commercial Bank exists for providing financial services to the general public, and includes a wide range of services from basic to more complex. This is the best institution for Jeff's savings account.
C) An insurance company likely will not offer the service Jeff needs.
D)Trust Company: A Trust Company takes charge of a set of assets, often an estate or large sum of money, due to a potential conflict of interest or a temporary period of uncertainty regarding who is entitled to the assets.
As for the second list:
Investment banks and asset management companies take a more active role in investing the funds. Typically there is a significant minimum investment, some higher fees, and more exposure to risk. These are not ideal options for Jeff's basic savings account.
A credit union offers savings account, and is a viable option for Jeff. However, the best option of this list is a savings and loan association, as they specialize in this service.
