Which of the following describes the 'standard of deferred payment' function of money?

The 'standard of deferred payment' function of money refers specifically to its role in enabling transactions that occur over time. This function allows money to be used as a agreed-upon measure for settling debts in the future. When buyers and sellers engage in credit arrangements, they agree on a price today but the payment can be made at a later date. This is essential in many forms of credit and loan agreements, where the terms of repayment are specified, facilitating future exchanges based on current monetary value.

In this context, this function of money is vital because it provides a stable basis for such agreements, reassuring both parties that the money will maintain its value over time. This underpins various aspects of economic activity, including loans, mortgages, and other credit transactions, thereby promoting commerce and economic growth.

The other options involve different roles that money plays in the economy, such as measuring relative values (comparing prices), quantifying economic health (measuring inflation), and assessing overall economic activity (tracking output), but none of these directly align with the concept of deferred payments, which is specifically linked to future transactions based on an agreed price.