Question:

Which choice represents the medium of exchange function of money?

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Sam saved $30 per week to buy a new DVD player. He compared two different models: a Panasonic that cost $130 and a Sony model that cost $140. Sam decided to purchase the Sony DVD player for $140.

A. Sam paid $140 for the DVD player.

B. Sam saved $30 per week.

C. The Panasonic model cost less than the Sony model.

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2 ANSWERS


  1. My money on Option "B". Because Sam knows that he can get DVD player by paying dollars so he saves money and when he has enough amount to purchase money he get the DVD.


  2. Answer is A. Sam gave 140 dollars in order to buy the DVD player, thus 140 dollars represent the medium of exchange function of money.

    I hope this helps

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