Business

Checkpoint Money

Unit of account is a foundation which determines the price of goods that can be traded through out our economy. It would be considered the common foundation, without it we would not be able to barter our goods. Measure of value is how our money functions for measuring units for the price of a good. In most places currencies are used as a unit of account, this can include objects such as; gold or silver. An example of this could be; a bag of chips my cost $2.00 and the price of a gallon of milk is $4.00, without common unit account, we would then say that the bag of chips costs ½ of a gallon of milk.
Medium of Exchange I believe is something we do not see as much in our world today. This is use as an intermediary instrument to facilitate payment for goods and services. Basically it is one commodity in exchange for another. This can not occur unless both parties agree to what each have to offer. For instance if I offer to clean a friends house in exchange for simply computer repairs, I would be offering a service in exchange for another service. In this case both services that are offered to one another are being used as money.
Purchasing a quantity of goods and services that provide the same value would be considered Store of Value. It is something that can be purchased today but used for value in the future. Inflation is the primary ability of money to store value. If I buy a house today while the market is low planning to make money in the future by selling the house when the market goes up, this would be an example of Store of Value.

References

Book Rags. (2000-2006). Three Functions of Money. In Book Rags. Retrieved August
20, 2010, from Book Rags, Inc. website: http://www.bookrags.com

Mankiw, N. G. (2007). Principles of Economics (Mason, OH: South-Western Cengage

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Learning., Ed., 4th ed.).

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