Unit of Account

Store of Value

Economic Functions of a Commodity

In an economic model where grain is the only good and there is no formal currency, one person agrees to lend 100 units of grain to another. The agreement specifies that 110 units of grain must be repaid after one year. In the specific act of defining the size of the debt and the amount to be repaid, what economic role is the grain primarily fulfilling?

Dual Functions of a Commodity in a Simple Economy

In a simplified economic model where grain is the only good and there is no formal currency, grain can serve different economic functions. Match each scenario with the primary economic function of grain it illustrates.

Evaluating a Commodity's Economic Functions

In a simplified economic model where the only good is grain and no formal currency exists, the fact that individuals can hold onto their grain to consume or lend out at a later date means that grain is fulfilling all three primary functions of money.

In a simplified economic model where grain is the only good and no formal currency exists, an individual sets aside 20 units of grain from their harvest to consume during the winter. In this context, the grain is primarily fulfilling the role of a ____.

In a simplified economic model where grain is the only good and there is no formal currency, a loan transaction occurs. Arrange the following events in the logical order they would happen, from the initial agreement to the final settlement.

In an economy where grain is the only good and there is no currency, a farmer lends 50 bushels of grain to a neighbor, with the agreement that 55 bushels will be repaid next year. The farmer then stores an additional 100 bushels in a secure silo for her own future use. Which statement best analyzes the economic roles of grain in this scenario?

In a simple economy where apples are the only good and there is no currency, a farmer lends 100 apples to a baker, with the agreement that 110 apples will be repaid in one year. During that year, a severe blight drastically reduces the apple harvest, making each remaining apple much more valuable. Which statement provides the best analysis of the economic functions of apples in this situation?