In a less-developed economy, cattle is widely accepted as payment for goods and services. Nearly all goods and services are priced in terms of cattle; however, cows vary in quality, become less valuable with age, and are difficult to move over long distances. Which of the following functions of money do cattle provide? Select the two correct answers.(1 point)

Question

Responses

medium of exchange
medium of exchange

uniformity
uniformity

store of value
store of value

portability
portability

unit of account

Answer 1

Cattle primarily fulfill the following two functions of money in a less-developed economy:

1. Medium of exchange - Cattle are used as a method of payment for goods and services, which aligns with the definition of a medium of exchange.

2. Store of value - Cattle can hold value over time, although their value may diminish with age and they can vary in quality; they still retain some degree of value for future transactions.

The other options, such as "uniformity," "portability," and "unit of account," are not fully applicable to cattle in the context provided. Therefore, the correct answers are:

• Medium of exchange
• Store of value