Answered: Ali purchases a candy bar with his…

Ali purchases a candy bar with his allowance. This represents using money as A medium of exchange. A store of value. An unit of account. An unit of transaction.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter18: Money And The Federal Reserve System

Section: Chapter Questions

Problem 1SQ

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Concept explainers

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.

Question

Ali purchases a candy bar with his allowance. This represents using money as

A medium of exchange.
A store of value.
An unit of account.
An unit of transaction.

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