2 Gold may be a better store of value than US money but woul

2. \"Gold may be a better store of value than US money, but would function as a poorer medium of exchange and unit of account than US money.\" Do you agree with this statement? If yes, explain why you agree. If no, explain why you disagree.

Solution

ANSWER:

I agree with the statement that Gold may be a better store of value than U.S. money, however will fail to perform function as a poorer medium of exchange and unit of account than US money. The reasons in support of the statement are:

--U.S. money has numerous face values thus makes simpler to pay the accurate amount of what something cost as oppose to gold, which we cannot break in half.

--Gold will never lose its worth in comparison to US money. U.S. money throughout the years has become overvalued or devalued because inflation and deflation affects its value

--An efficient medium of exchange must exist in sufficiently large quantity to meet the requirements of exchange or trade.

--Gold may be inconvenient to trade daily or store and can vary in value highly as compare to money therefore cannot be a capital asset at all

--Money is more portable as can easily be carried in small denomination but holds high value, especially with the usage of Automated Teller Machine cards.

--Gold is less acceptable compared to money This because, a person can exchange a good for gold without any objection or question, but gold cannot be easily accepted thus makes it a poor exchange medium