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QUESTION:

1. The roles of money

Felix wants to both purchase a new laptop and go Florida for spring break. The computer is priced at $1,299, and the vacation is priced at $800. He has only $1,574 in his checking account, so he cannot afford to purchase both. After much thought, Felix buys the laptop and writes a check for $1,299.
Identify what role money plays in each of the following parts of the story.
Hint: Select each role only once.
Role of Money
Medium of Exchange
Unit of Account
Store of Value
Felix can easily determine that the price of the laptop is more than the price of the vacation.
Felix has $1,574 in his checking account.
Felix writes a check for $1,299.

ANSWER:

Hint: Select each role only once.
Role of Money
Medium of Exchange
Unit of Account
Store of Value
Felix can easily determine that the price of the laptop is more than the price of the vacation.
Felix has $1,574 in his checking account.
Felix writes a check for $1,299.
Points:
1 / 1
Close Explanation
Explanation:
Money acts as a unit of account by providing buyers and sellers a common reference point for valuing goods and services. The fact that the prices of both the laptop and the vacation are listed in the same units (dollars) means that Felix can easily compare the prices of his options.
Money acts as a store of value by providing a means of transferring purchasing power from the present to the future. By keeping money in his checking account, Felix stores wealth until he is ready to make a purchase.
Finally, money acts as a medium of exchange by providing an accepted method of payment for goods and services. In this case, Felix writes a check, and money is withdrawn from the checking account to pay the computer company $1,299 in exchange for a new computer.

Posted by Cleveland on September 9, 2024
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