A.C. Pigou is the economist who said that "money is the measuring rod of utility."

Explanation:

Money is an important component of any economic system. It serves as a medium of exchange, a store of value, and a unit of account. As a unit of account, money is used to measure the value of goods and services exchanged in the economy. In other words, it is used to measure the utility of goods and services.

A.C. Pigou, a British economist, argued that money is the most reliable and accurate way to measure the utility of goods and services. In his book "The Economics of Welfare," published in 1920, Pigou wrote that "the money value of a good is a measure of the utility which it yields to its possessor."

According to Pigou, money serves as a measuring rod of utility because:

• Money is a common denominator: Money is a common unit of account that allows us to compare the utility of different goods and services. By expressing the value of goods and services in terms of money, we can compare them on a common basis.

• Money is objective: Unlike subjective measures of utility, such as happiness or satisfaction, money is an objective measure that can be quantified and compared across individuals and time periods.

• Money reflects opportunity costs: The price of a good reflects the opportunity cost of acquiring it. The opportunity cost is the value of the next best alternative foregone. By paying money for a good, we are giving up the opportunity to use that money for some other purpose. Thus, the price of a good reflects the utility we derive from acquiring it relative to the utility we could have derived from using the money for some other purpose.

In conclusion, Pigou's statement that "money is the measuring rod of utility" highlights the importance of money as a unit of account in measuring the value of goods and services exchanged in the economy.