Money would cease to be a good store of value when

Assessment: WAEC SSCE - Economics - 2020 (Objective) Subject: Economics

Question 1 Report

Money would cease to be a good store of value when 

Answer Details
Money would cease to be a good store of value when prices of goods and services are rising rapidly. This is because when prices rise quickly, the value of money decreases over time, and people can buy fewer goods and services with the same amount of money. As a result, people may look for alternative stores of value, such as real estate, gold, or other assets that retain their value better than cash. In contrast, when prices are falling slowly or rising slowly, money can still maintain its value as a store of value because its purchasing power remains relatively stable. However, high levels of unemployment can also affect the value of money as it reduces the amount of income and spending power in the economy, leading to lower demand for goods and services, which may result in deflation.

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