Money Functions and Characteristics

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Money Functions and Characteristics Unit of Account. This scenario of money I would attribute to a bank account that each of us most likely has. I have an account of which my paycheck from my employer is directly deposited each payday. I receive a statement delineating my pay as well as my deductions which calculates to my final net pay that is the amount deposited into my bank. This allows for the monies to be accounted for, which I can review online. Medium of Exchange. Once my paycheck has been accounted for, I have a debit/credit card of which I am able to make purchases that come directly out of my bank account. The exchange occurs when those purchases are made as well as any bills I have set to be directly debited on a certain day of each month. This also creates an accounting through my bank allowing me to keep checks and balance from the time of the pay deposit to each purchase made through the exchange. Store of Value. In my opinion, when I go through the reading, I think of a retirement account, such as an IRA or 401k. These accounts make it possible to set aside funds in order to be used after an individual completes years of employment and contributions of these account. This starts the process over with these monies becoming a unit of account, then as a medium of exchange. The money cycle is meant to recycle with each purchase for goods or services. The recipient of such funds then in turn produces the goods or service and spend the monies to support themselves to exchange for other goods and services or to support their

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