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What does money achieve when it works as a standard of value?
AIt holds wealth safely until the owner wants to spend
BIt lets goods and services be priced in standard units
CIt removes the effect of inflation on stored savings
DIt settles a payment without any physical cash moving
Answer & Solution
Correct answer: B. It lets goods and services be priced in standard units
1. A standard of value is a form of money whose value everyone accepts.
2. Once that exists, goods and services can be priced in standard units.
3. This makes value easy to measure and lets transactions be recorded in consistent terms.
4. Holding wealth for later is the store of value function, which is a separate job money performs.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 15 "Understanding Money and Financial Institutions", section 15.1 Show Me the Money_
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