2. The functions of money Consider the following scenario: Kim has saved $30 per

Question

2. The functions of money Consider the following scenario: Kim has saved $30 per week to buy a new DVD player. She compares two different models: a Panaview that is price Aa Aa at $130 and a Zony model that is priced at $140. Kim decides to purchase the Zony DVD player for $140. Identify what role money plays in each of the following parts of the story. (Hint: Select each role only once.) Role of Money Medium Measure Store of Exchange of Value of Value Kim pays $140 for the DVD player Kim saved $30 per week. Kim can easily determine that the Panaview model is priced lower than theO Zony model. If Kim pays with a credit card, then the debt she incurs is written in terms of money values. This is an example of money as a

Explanation / Answer

If Kim pays $140 for the DVD players, then it is an example of a medium of exchange because for DVD player she has paid an equal amount in terms of money.

If Kim saved $30 per week, it is an example of a store of value because she has saved in terms of money.

Kim can easily determine that the pageview model is priced lower than the Zony model. This is an example of money role as the measure of value because money is playing a role in comparing the price of the two model.

If Kim pays with the credit card, then the debt she incurs written in terms of money values. This is an example of money as the measure of value because money is playing a role in measuring the value of the product.

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