The characteristics and functions of money
Money is anything that people widely accept as payment. It works because it has four key functions: it lets people buy things, store wealth, compare prices, and settle debts later.
Real World
Bitcoin fails as money in practice: its price swings wildly (poor store of value) and few retailers accept it (limited medium of exchange), illustrating why it does not fully satisfy the four functions despite being called a currency.
Exam Focus
List all four functions by name and apply each one — answers that only describe money without using the functions miss straightforward definition marks.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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