Question

Jake wants to purchase a new computer and go to the Caribbean for spring break. The computer is priced at $1,299, and the vacation is priced at $800. He has only $1,574 in his checking account, so he cannot afford to purchase both. After much thought, Jake buys the computer and writes a check for $1,299.Identify what role money plays in each of the following parts of the story.

Answer 1

Answer:

Explanation:

Money is any object that is generally acceptable as payment of goods and services and repayment of debts. Money has three functions namely unit of account, store of value and medium of exchange. In the question, Jake was able to compare the prices of the computer, the vacation and the amount in his account using the function of money as a unit of account to make decision to buy the computer.  He uses the function of money as a store of value by writing a check for the computer from his account where he had stored the money for a period and it still remain valuable in exchange and he uses the function of money as a medium of exchange to pay for the computer which the seller accepted.