Prisoners sometimes determine a single good to be used as money. This good becomes a. a unit of account, but not a medium of exchange. b. neither a unit of account nor a medium of exchange. c. a medium of exchange and a unit of account. d. a medium of exchange, but not a unit of account.

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Business

Baldwin

1 September, 19:04

Prisoners sometimes determine a single good to be used as money. This good becomes a. a unit of account, but not a medium of exchange. b. neither a unit of account nor a medium of exchange. c. a medium of exchange and a unit of account. d. a medium of exchange, but not a unit of account.

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Lam · Answer 1

This good becomes a medium of exchange and a unit of account

Explanation:

Money is also characterised by the three features or services it offers. Money serves as an exchange tool, a value store, and a deposit unit.

As a mode of trade for promoting trades, Money's most important function. Both trades, without capital, will need to be carried out with a barter that involves trading one good or another directly. The dilemma with a barter scheme is to provide a product or service of equivalent value, as the seller always desires, in order to receive the same good or service from a manufacturer.

Money also serves as a transaction unit to calculate the worth of the exchangeable products and services. In order to be able to determine the worth or quality of the product, both the manufacturer and the customer should agree the quantity to be supplied and the quantity of the good to be ordered.