32 Questions
Which of the following is NOT a characteristic of money?
Indivisibility
What is commodity money?
Money that represents a specific amount of a commodity such as gold or silver
Which type of money has no consumption or investment use and is basically useless pieces of paper?
Fiat money
What does divisibility mean in the context of money?
Money can be divided into small increments for exchange
Which characteristic of money refers to its ability to be easily moved from one location to another when needed?
Transportability
What does fiat money refer to?
Money declared by the government to be legal tender with no intrinsic value
What is the meaning of 'noncounterfeit ability' in the context of money?
The inability to easily duplicate money
What is the primary responsibility of a country's Government in relation to the supply of money?
To control and maintain an adequate money supply to the market
Which type of money consists of the book credit that banks extend to their depositors?
Bank money/checks
What does 'plastic money' refer to in the context of the text?
Hard plastic cards used as a substitute for actual bank notes
What is the primary function of money as a 'unit of value'?
Measuring the value of goods and services produced in an economy
'Medium of exchange' refers to money's function as:
Facilitating transactions of goods and services
'Standard of deferred payments' primarily relates to:
The basis for deferred payments
'Store of value' in relation to money implies:
The ability to retain its value over time
What does 'fiat money' represent?
Money whose value is less than the value it represents as money
Which type of money has been replaced with fiat money?
Commodity money
Which characteristic of money ensures that it does not easily decompose, deteriorate, degrade, or otherwise change form over an extended period of time?
Durability
Which type of money is backed 100% by precious metals?
Commodity money
What characteristic of money allows it to be divided into small increments for the exchange of goods with varying values?
Divisibility
Which function of money specifically refers to its ability to be widely used and accepted in transactions for the transfer of goods and services?
Medium of exchange
What type of money has no consumption or investment use and is essentially worthless pieces of paper?
Fiat money
'Checks' and 'e-money' primarily fall under which category of money?
Representative money
What is the primary function of money as a 'standard of deferred payments'?
It serves as a basis for maintaining accounts of deferred payments.
What does 'fiat money' represent?
A good, the value of which is less than the value it represents as money.
What does 'store of value' in relation to money imply?
The ability to store surplus value under barter.
What is the meaning of 'limited supply' in relation to money?
It refers to the restriction on the amount of money in circulation.
Which type of money consists of the book credit that banks extend to their depositors?
Bank money/checks
'Plastic money' is used in reference to:
Hard plastic cards used in place of actual bank notes.
'Fiat money' has replaced which type of money?
Commodity money
'Acceptability' means that:
Everyone must be able to use money for transactions.
What does 'noncounterfeit ability' mean in the context of money?
Money cannot be easily duplicated.
What does 'commodity money' refer to?
A good whose value serves as the value of money.
Test your knowledge of the definition and evolution of money, including commodity money, representative money, and fiat money. Explore the role of money as a medium of exchange in transactions and the transfer of goods and services.
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