21. An individual deposits half of his salary in a bank account every month. Which function of money represents this action
Answer: C
The action represents the store of value function of money.
Depositing half of his salary in a bank account every month exemplifies the store of value function of money. This function allows individuals to save and preserve purchasing power for future use.
A) Unit of account
The unit of account function of money refers to its role in providing a standard numerical measure of value, allowing for the valuation and comparison of goods and services. While this function is essential for pricing and accounting, it does not pertain to the act of saving or depositing money in a bank account.
B) Medium of exchange
The medium of exchange function of money facilitates transactions by providing a universally accepted method for buying and selling goods and services. Although banking transactions may involve this function, the act of depositing money into an account is primarily about saving rather than conducting an exchange.
C) Store of value
The store of value function of money is highlighted by the action of depositing half of a salary into a bank account. This function allows individuals to retain their wealth over time, ensuring that money can be saved and spent in the future, maintaining its value despite the passage of time.
D) Barter
Barter refers to the direct exchange of goods and services without the use of money. Since the action of depositing money in a bank does not involve trading goods or services directly, this option is not relevant to the question.
Conclusion
The correct answer, C) Store of value, accurately describes the action of depositing money into a bank account, as it emphasizes the preservation of wealth over time. In contrast, the other options fail to relate directly to the concept of saving or maintaining value, making them unsuitable in this context.