It is possible to derive the value of GDP of a country. Which function of money is applicable here?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. Unit of account.
- The unit of account function of money is integral to calculating GDP because it standardizes the measurement of economic activity.
- By expressing the value of diverse goods and services in a common monetary unit, it facilitates the aggregation and comparison necessary for deriving GDP.