18. An individual deposits half of his salary in a bank account every month. Which function of money represents this action?
Answer: C
The action of depositing half of his salary in a bank account represents the function of money as a store of value.
Storing money in a bank account allows individuals to save their income for future use, preserving its value over time. This behavior aligns directly with the concept of money serving as a store of value.
A) Unit of account
This function refers to money providing a standard measure of value, which allows for the pricing of goods and services. While the individual’s salary can be measured in monetary terms, depositing money does not directly relate to this function.
B) Medium of exchange
As a medium of exchange, money facilitates transactions for goods and services. Although depositing money prepares it for future transactions, the act of depositing itself does not exemplify this function.
C) Store of value
Depositing half of his salary in a bank account is a clear representation of money functioning as a store of value. This action preserves the purchasing power of the salary, allowing the individual to access those funds later while maintaining their value.
D) Barter
Barter involves the exchange of goods and services directly without the use of money. Since the action in question involves depositing money rather than trading goods, this option is not applicable.
Conclusion
The function of money as a store of value is exemplified by the individual’s decision to deposit half of his salary in a bank account, ensuring that his wealth retains its value over time. The other options do not accurately describe this financial action, as they pertain to different functions of money which are not relevant in this context.