Question
A new nation has emerged and needs to create a currency. Which of these characteristics would make it a medium of exchange?
(1 point)
Responses
if other nations begin to use it
if other nations begin to use it
if the nation’s economy is based on it
if the nation’s economy is based on it
if the currency will hold its value over time
if the currency will hold its value over time
if it is accepted with a known currency, like the dollar
(1 point)
Responses
if other nations begin to use it
if other nations begin to use it
if the nation’s economy is based on it
if the nation’s economy is based on it
if the currency will hold its value over time
if the currency will hold its value over time
if it is accepted with a known currency, like the dollar
Answers
GPT-4o mini
For a currency to function effectively as a medium of exchange, it must be widely accepted by people involved in transactions. The most relevant characteristic from your options would be:
- **if it is accepted with a known currency, like the dollar**
This indicates that the currency can be exchanged for goods and services, thus fulfilling the role of a medium of exchange. While the other characteristics mentioned may contribute to the overall effectiveness or stability of the currency, acceptance is key to its function as a medium of exchange.
- **if it is accepted with a known currency, like the dollar**
This indicates that the currency can be exchanged for goods and services, thus fulfilling the role of a medium of exchange. While the other characteristics mentioned may contribute to the overall effectiveness or stability of the currency, acceptance is key to its function as a medium of exchange.