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Difficulty: Very hardMeaning, Functions, and Characteristics of Money

Money's function as a store of value is classified as a primary function because it enables economic agents to measure and express the market prices of goods and services in commercial transactions.

Answer: Answer

Answer

False
The statement is False because it contains two conceptual errors: first, store of value is a secondary (subsidiary) function rather than a primary function; second, measuring and expressing market prices defines the unit of account function.

Step-by-Step Solution

1
Analyze the functional classification of money
Primary functions of money are limited to medium of exchange and unit of account (measure of value). Secondary functions include store of value, standard of deferred payment, and transfer of value.
Distinguishing between primary and secondary functions requires identifying the immediate fundamental roles of money versus its derived subsidiary roles.
2
Evaluate the definition attributed to store of value
Measuring and stating prices in standard monetary units is the definition of the unit of account function, whereas store of value refers to holding liquidity/purchasing power across time.
The statement incorrectly conflates the definition of unit of account with store of value while misclassifying store of value as a primary function.

Key Concept

Primary vs Secondary Functions of Money
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Topics

Meaning, Functions, and Characteristics of Money

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