Question:
The transaction demand for money is very closely associated with money’s function as a
(1) store of value.
(2) standard unit of account.
(3) measure of value.
(4) medium of exchange.
(5) standard of deferred payment.
Correct Answer:
(4)
Answer Explanation:
The transaction demand for money is the desire to hold cash to conduct day-to-day purchases and business operations. This is directly tied to money’s primary function as a “medium of exchange,” which eliminates the inefficiencies of a barter system.
Topic: Money and Banking Year: 2018
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