Question

When an item is purchased, money is exchanged for the right to

(a): file a claim.

(b): own the item.

(c): use credit.

(d): pay for item?

Answer 1

hi friend,
own the item.

Answer 2

Option b is the correct answer.

When an item is purchased, money is exchanged for the right to own the item.

In the above answer two features or functions of money are shown:

• unit of account
• medium of exchange

1. money has done away with the shortcomings of the barter system. Any commodity can be purchased in exchange of money. Therefore, money serves as a medium of exchange.
2. As a unit of account it implies that a commodity can be expressed in terms of money.
3. So when an item is purchased money (medium of exchange) is exchanged for the right to own the item because we have paid an amount equal to the amount in which the commodity is expressed ( unit of account).