Match each money characteristic or function on the left with its corresponding operational description on the right.
- PortabilityAllows purchasing power to be carried around conveniently for daily trade without undue physical burden.
- DivisibilityFacilitates transactions of small and varying denominations by enabling exact change.
- Standard of deferred paymentProvides an agreed unit for settling future credit obligations and long-term contracts.
- Store of valueEnables income and purchasing power to be saved and preserved for future consumption.
Answer
Portability matches with allowing purchasing power to be carried around conveniently; Divisibility matches with facilitating transactions of small and varying denominations; Standard of deferred payment matches with providing an agreed unit for settling future credit obligations; Store of value matches with enabling income to be saved and preserved for future consumption.
Each feature of money uniquely satisfies a distinct commercial need: portability enables physical ease of carrying currency; divisibility permits payments of various exact sizes; standard of deferred payment facilitates credit and deferred settlements; and store of value allows saving purchasing power for future periods.
Step-by-Step Solution
Key Concept
Functions and Characteristics of Money