1. The cryptocurrency Bitcoin can satisfy which two of the three functions of money. Which function does it NOT satisfy? A. unit of account B. store of value C. medium of exchange D. bitcoin satisfies all of the functions of money
Question
- The cryptocurrency Bitcoin can satisfy which two of the three functions of money. Which function does it NOT satisfy? A. unit of account B. store of value C. medium of exchange D. bitcoin satisfies all of the functions of money
Solution
Bitcoin, as a cryptocurrency, can satisfy two of the three functions of money.
-
Medium of Exchange: Bitcoin can be used as a medium of exchange because it is accepted by some businesses and entities as a form of payment.
-
Store of Value: Bitcoin can also serve as a store of value. This means that it can be saved, retrieved, and exchanged at a later time, and its value will remain relatively stable in the meantime.
However, Bitcoin does not fully satisfy the function of a unit of account.
A. Unit of Account: This is the function of money that Bitcoin does not fully satisfy. A unit of account means that money is used as the common base for prices. While Bitcoin can be used to price goods and services, it is not universally accepted and its value is highly volatile, which makes it less reliable as a unit of account compared to traditional forms of money.
So, the answer is that Bitcoin does not fully satisfy the function of a unit of account.
Similar Questions
Which of the following are functions of money?Multiple select question.Store of valueUnit of accountMedium of exchangeHedge against inflation
3. Which one of the following is not a feature of money?(A) Medium of exchange(B) Lack of divisibility(C) A store of value(D) A unit of account
Discuss two main functions of Money
Which of the following statement is TRUE about the economic functions of money?Group of answer choicesAll available answersMoney serves as a ‘Means of Payment’ since it can be viewed as a mechanism for exchange of goods or services in all types of transactions.Money acts as an ‘Unit of Account’ where, in the pricing of items, it becomes a standard unit of measurement of the value of goods or services.Money serves as a 'Store of Value' in that assets held in the form of money can be used as an investment for future use.
Which of the following is a correct listing of money's functions?Group of answer choicessource of credit, value of transaction costs, unit of bartermedium of barter, medium of exchange, medium of transactionsunit of barter, unit of accout, a unit of incomestore of value, store of exchange, measure of accountstore of value, medium of exchange, unit of account
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.