What is a function of money that allows it to serve as a benchmark for pricing?

The correct answer is the unit of account. This function of money allows it to serve as a standard measurement for pricing goods and services, making it possible to compare their value in a consistent manner. When money serves as a unit of account, it provides a common baseline that facilitates the valuation of various items in an economy, allowing consumers and producers to make informed decisions based on price.

For instance, if a loaf of bread is priced at $2, while a gallon of milk is priced at $4, individuals can easily understand that milk costs twice as much as bread. In this way, the unit of account function of money helps to simplify the process of economic transactions and enhances efficiency in the market by providing a clear way to assess the worth of diverse offerings.

In contrast, the other functions of money, such as a means of exchange, store of value, and standard of deferred payment, address different roles that money plays in economic activity but do not specifically pertain to its ability to act as a benchmark for pricing.