Which function of money allows it to serve as a measure of the value of goods and services?

The function of money that allows it to serve as a measure of the value of goods and services is the unit of account. This function establishes a common standard for measuring the value of different products, allowing consumers and producers to compare prices effectively. By providing a consistent measure, it simplifies transactions and helps individuals understand what they can expect to pay or receive in exchange for various goods and services.

A unit of account enables the pricing mechanism in an economy, helping to reflect the relative worth of items. This is fundamental in establishing budgets, setting prices, and recording transactions, making it an essential characteristic for an efficient economic exchange system.

In contrast, other functions like a store of value, medium of exchange, and standard of deferred payment serve different purposes. A store of value relates to the ability of money to retain value over time, allowing individuals to save and plan for future expenditures. The medium of exchange function facilitates transactions by allowing money to be used as an intermediary in trade, making exchanges simpler than barter. Lastly, the standard of deferred payment focuses on the use of money for settling debts over time, enabling individuals to agree on future payments. While all these functions are important, it is the unit of account that directly relates to measuring value.