What function of money allows people to compare the worth of one good with that of another?

What function of money allows people to compare the worth of one good with that of another?

• A. Medium of exchange
• B. Measure of value
• C. Store of value
• D. Unit of account

Answer: (B)

Money’s function as a measure of value is what lets you express the worth of different goods in the same monetary unit and directly compare them. When prices are given in dollars (or another currency), you can see at a glance which item is more valuable or cheaper, and make informed choices—for example, deciding between two items by comparing their price tags. This role provides a common scale for valuing goods, which is essential for budgeting, price comparisons, and evaluating opportunities. The other roles of money—being a medium of exchange and a store of value—support trade and keeping value over time, but they don’t by themselves provide a straightforward comparison of worth across different goods. The unit of account concept is the term for this measuring function, which is why the measure of value best describes the idea here.

Money’s function as a measure of value is what lets you express the worth of different goods in the same monetary unit and directly compare them. When prices are given in dollars (or another currency), you can see at a glance which item is more valuable or cheaper, and make informed choices—for example, deciding between two items by comparing their price tags. This role provides a common scale for valuing goods, which is essential for budgeting, price comparisons, and evaluating opportunities.

The other roles of money—being a medium of exchange and a store of value—support trade and keeping value over time, but they don’t by themselves provide a straightforward comparison of worth across different goods. The unit of account concept is the term for this measuring function, which is why the measure of value best describes the idea here.