Question

If the country decided to use only government produced stone bricks as currency (which could not be counterfeited), which one of the following functions of money would be the least fulfilled?

Store of value

Unit of account

Medium of Exchange

Answer 1

If the country decided to use only government produced stone bricks as currency , the function that can be least fulfilled is Unit of account and Store of Value .

Unit of account means that  Knowing the value or price of a good, in terms of money, enables both the supplier and the purchaser of the good to make decisions about how much of the good to supply and how much of the good to purchase. But when there are bricks with you , it is difficuilt to for both supplier and purchaser to make decisions about how much goods to supply by taking how many bricks and how much to purchase by giving how many bricks respectively .

In order to be a medium of exchange, money must hold its value over time; that is, it must be a store of value. If money could not be stored for some period of time and still remain valuable in exchange, it would not solve the double coincidence of wants problem and therefore would not be adopted as a medium of exchange but with the bricks as currency , after some time there may be a damage to bricks and in future they may or may not be accepted .