Asked by Morgan McCord on Apr 29, 2024

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Which of these signifies the role of money in any economy?

A) It acts as a tool for poverty alleviation in an economy.
B) It serves as a medium of exchange in an economy.
C) It indicates the economic wellbeing of a nation.
D) It helps to differentiate between the nominal and real income of a nation.
E) It is a clear indicator of the growth in national income.

Medium Of Exchange

An intermediary instrument used to facilitate the sale, purchase, or trade of goods and services by eliminating the need for a coincidence of wants in barter transactions.

Poverty Alleviation

Refers to strategies and initiatives aimed at reducing the number of people living in poverty.

Economic Wellbeing

A measurement of how well individuals and societies can fulfill their needs and wants, often associated with income, employment, and quality of life.

  • Understand the role and functions of money in an economy.
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Zybrea KnightMay 04, 2024
Final Answer :
B
Explanation :
Money serves as a medium of exchange in any economy, allowing people to easily trade goods and services without the need for bartering. While money can sometimes be used for poverty alleviation, it is not its primary role. Money can also not be used to indicate the economic wellbeing of a nation, as other factors such as employment rates and GDP growth also play a role. Money can help differentiate between nominal and real income, but this is not its main role either. Lastly, while an increase in national income can sometimes lead to an increase in the amount of money in circulation, this correlation is not always true.