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The Four Basic Functions of Money

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Money serves as a standard of deferred payment when:

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1. How does inflation prevent most of the money in use today from serving as a pure store of value?

2. Money is a medium of exchange because:

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About This Quiz & Worksheet

You know that the dollar bills in your pocket are money, but do you know why? Find out all about the primary functions of money using this awesome quiz and worksheet. Learn about each of money's four defining characteristics and learn how to explain why something is or is not money.

Quiz & Worksheet Goals

This worksheet and quiz will assess your knowledge of:

  • The functions of money
  • Medium of exchange
  • The phrase that describes when money kept in reserve for later use
  • Standard of deferred payment

Skills Practiced

Use these skills when working with the worksheet and quiz:

  • Reading comprehension - ensure that you draw the most important information from the related lesson on the primary functions of money
  • Information recall - access the knowledge you've gained regarding how money is used in the real world
  • Critical thinking - apply relevant concepts to examine information about why money is used as a medium of exchange

Additional Learning

The corresponding lesson called The Four Basic Functions of Money will prepare you to:

  • Describe why quoting everything in terms of money in an economy is a good thing
  • Explain why inflation prevents money from being a true store of value
  • Discuss why things like gold or an expensive painting do not count as money
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