In an economy with n n\,n distinct goods, transitioning from a barter system to a monetary system dramatically simplifies the pricing of goods. Which of the following correctly identifies the function of money that achieves this simplification, and the corresponding reduction in the number of relative prices that market participants must track?
Function: Medium of exchange; reduction from n(n−1)n(n-1)n(n−1) to nnn prices.
Function: Unit of account; reduction from n(n−1)2\frac{n(n-1)}{2}2n(n−1) to n−1n-1n−1 prices.
Function: Store of value; reduction from n2n^2n2 to n−1n-1n−1 prices.
Function: Standard for deferred payment; reduction from n!2\frac{n!}{2}2n! to nnn prices.
