Which of the following lists the three primary functions of money in an economy?

• A. Store of value, source of income, unit of labor
• B. Medium of exchange, unit of account, store of value
• C. Medium of exchange, means of production, store of value
• D. Unit of account, factor of production, measure of utility

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of money in microeconomics. Money serves specific functions that facilitate economic transactions and the functioning of the economy.
2. Step 2: Identify the primary functions of money. These are generally accepted as: Medium of exchange, Unit of account, and Store of value.
3. Step 3: Define each function: Medium of exchange means money is widely accepted in exchange for goods and services; Unit of account means money provides a common measure to value goods and services; Store of value means money can preserve value over time for future use.
4. Step 4: Evaluate the given options by comparing them to the three primary functions identified. Eliminate options that include terms unrelated to the functions of money, such as 'source of income', 'unit of labor', 'means of production', 'factor of production', or 'measure of utility'.
5. Step 5: Conclude that the correct list of the three primary functions of money is 'Medium of exchange, unit of account, store of value' because it matches the standard economic definitions.