Considering the criteria of being a medium of exchange, a unit of account and a store of value, which one/s of the following items potentially serve as money? A MasterCard A Peercoin Salt Coffee cups
Considering the criteria of being a medium of exchange, a unit of account and a store of value, which one/s of the following items potentially serve as money?
- A MasterCard
- A Peercoin
- Salt
- Coffee cups
Money has many primary functions or criteria such as a store of value, a unit of account, and medium of exchange and any item potentially serve as money if the item can also perform those functions or pass those criteria.
A master card potentially serves as money because it is widely accepted by people in exchange for goods and it provides means of payment. Although in the case of master credit card, the bank pays money to the seller and you pay money in future but you can easily get goods. It also can provide a unit of account as we can determine the value of the thing in term of money. The card can also be held its value over time.
The peer coin is a virtual currency and it is not accepted globally as it banned in many countries. The peer coin serves as a store of value. If the value of peer coins becomes zero or fully deflationary currency it cannot serve as a medium of exchange. So it does not serve as money according to given criteria.
The sugar and coffee cups do not have the potential to serve as money as it is not accepted by people. Also, you need to find a person who can buy these things in exchange for other goods. These things cannot hold its value for the future, are not durable and can have a different value for different people.
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