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Multiple Choice
When money is acting as a store of value, it allows an individual to:
A
measure the opportunity cost of a decision
B
facilitate the exchange of goods and services
C
compare the value of different goods and services
D
save purchasing power for future use
Verified step by step guidance
1
Understand the concept of money as a store of value: This means money can be saved and retrieved in the future, retaining its value over time to be used later.
Recognize that when money acts as a store of value, it allows individuals to save purchasing power, meaning they can hold onto money now and use it to buy goods or services in the future.
Differentiate this function from other functions of money: as a medium of exchange (facilitating transactions) and as a unit of account (measuring and comparing value).
Identify that measuring opportunity cost or comparing values are related to money's role as a unit of account, not as a store of value.
Conclude that the correct function described is saving purchasing power for future use, which is the essence of money acting as a store of value.