Money & Banking Lecture 1: Introduction to Money Definition & Functions
32 Questions
1 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which of the following is NOT a characteristic of money?

  • Indivisibility (correct)
  • Acceptability
  • Durability
  • Transportability

    • What is commodity money?

  • Money that is backed 100% by precious metals
  • Money made from certain stones and cigarettes
  • Money that is widely used and accepted in transactions
  • Money that represents a specific amount of a commodity such as gold or silver (correct)

    • Which type of money has no consumption or investment use and is basically useless pieces of paper?

  • Commodity money
  • Fiat money (correct)
  • Plastic money
  • Representative money

    • What does divisibility mean in the context of money?

    <p>Money can be divided into small increments for exchange</p> Signup and view all the answers

    Which characteristic of money refers to its ability to be easily moved from one location to another when needed?

    <p>Transportability</p> Signup and view all the answers

    What does fiat money refer to?

    <p>Money declared by the government to be legal tender with no intrinsic value</p> Signup and view all the answers

    What is the meaning of 'noncounterfeit ability' in the context of money?

    <p>The inability to easily duplicate money</p> Signup and view all the answers

    What is the primary responsibility of a country's Government in relation to the supply of money?

    <p>To control and maintain an adequate money supply to the market</p> Signup and view all the answers

    Which type of money consists of the book credit that banks extend to their depositors?

    <p>Bank money/checks</p> Signup and view all the answers

    What does 'plastic money' refer to in the context of the text?

    <p>Hard plastic cards used as a substitute for actual bank notes</p> Signup and view all the answers

    What is the primary function of money as a 'unit of value'?

    <p>Measuring the value of goods and services produced in an economy</p> Signup and view all the answers

    'Medium of exchange' refers to money's function as:

    <p>Facilitating transactions of goods and services</p> Signup and view all the answers

    'Standard of deferred payments' primarily relates to:

    <p>The basis for deferred payments</p> Signup and view all the answers

    'Store of value' in relation to money implies:

    <p>The ability to retain its value over time</p> Signup and view all the answers

    What does 'fiat money' represent?

    <p>Money whose value is less than the value it represents as money</p> Signup and view all the answers

    Which type of money has been replaced with fiat money?

    <p>Commodity money</p> Signup and view all the answers

    Which characteristic of money ensures that it does not easily decompose, deteriorate, degrade, or otherwise change form over an extended period of time?

    <p>Durability</p> Signup and view all the answers

    Which type of money is backed 100% by precious metals?

    <p>Commodity money</p> Signup and view all the answers

    What characteristic of money allows it to be divided into small increments for the exchange of goods with varying values?

    <p>Divisibility</p> Signup and view all the answers

    Which function of money specifically refers to its ability to be widely used and accepted in transactions for the transfer of goods and services?

    <p>Medium of exchange</p> Signup and view all the answers

    What type of money has no consumption or investment use and is essentially worthless pieces of paper?

    <p>Fiat money</p> Signup and view all the answers

    'Checks' and 'e-money' primarily fall under which category of money?

    <p>Representative money</p> Signup and view all the answers

    What is the primary function of money as a 'standard of deferred payments'?

    <p>It serves as a basis for maintaining accounts of deferred payments.</p> Signup and view all the answers

    What does 'fiat money' represent?

    <p>A good, the value of which is less than the value it represents as money.</p> Signup and view all the answers

    What does 'store of value' in relation to money imply?

    <p>The ability to store surplus value under barter.</p> Signup and view all the answers

    What is the meaning of 'limited supply' in relation to money?

    <p>It refers to the restriction on the amount of money in circulation.</p> Signup and view all the answers

    Which type of money consists of the book credit that banks extend to their depositors?

    <p>Bank money/checks</p> Signup and view all the answers

    'Plastic money' is used in reference to:

    <p>Hard plastic cards used in place of actual bank notes.</p> Signup and view all the answers

    'Fiat money' has replaced which type of money?

    <p>Commodity money</p> Signup and view all the answers

    'Acceptability' means that:

    <p>Everyone must be able to use money for transactions.</p> Signup and view all the answers

    What does 'noncounterfeit ability' mean in the context of money?

    <p>Money cannot be easily duplicated.</p> Signup and view all the answers

    What does 'commodity money' refer to?

    <p>A good whose value serves as the value of money.</p> Signup and view all the answers

    More Like This

    Money Main Idea
    3 questions

    Money Main Idea

    CleanWilliamsite avatar
    CleanWilliamsite
    Fiat Money Definition
    5 questions

    Fiat Money Definition

    BrotherlyTelescope avatar
    BrotherlyTelescope
    Money Definitions and Functions
    10 questions

    Money Definitions and Functions

    LowCostHarpy avatar
    LowCostHarpy
    Understanding Money and Banking System
    120 questions

    Understanding Money and Banking System

    JudiciousDetroit6938 avatar
    JudiciousDetroit6938
    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser