Which of the following is considered an economic property of money?

• A. It is always backed by gold
• B. It is only used for saving
• C. It serves as a medium of exchange
• D. It must be produced by private firms

Answer: (C)

Verified step by step guidance

1. Understand the concept of the economic properties of money, which are the characteristics that make money effective in its role within an economy.
2. Recall the three main economic properties of money: it serves as a medium of exchange, a unit of account, and a store of value.
3. Evaluate each option against these properties: 'It is always backed by gold' relates to a historical backing system, not an essential economic property of money itself.
4. 'It is only used for saving' is incorrect because money is primarily used for transactions, not just saving.
5. 'It serves as a medium of exchange' matches one of the fundamental economic properties of money, enabling goods and services to be traded efficiently.
6. 'It must be produced by private firms' is incorrect because money is typically issued by governments or central banks, not private firms.