Money Supply and Functions Quiz

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Questions and Answers

What is the function of money as a store of value?

  • It ensures double coincidence of wants
  • It is the most liquid asset in the economy
  • It provides the terms for recording debts
  • It allows transfer of purchasing power from present to future (correct)

What is the characteristic of fiat money?

  • It is used in barter transactions
  • It is the most liquid asset in the economy
  • It is backed by a commodity like gold
  • It has no intrinsic value and is established as money by government decree (correct)

What is commodity money?

  • Money backed by a government decree
  • Money with intrinsic value like gold (correct)
  • Money with no intrinsic value
  • Money that is redeemable for gold

What is the gold standard in the context of money?

<p>A system where paper money is redeemable for gold (B)</p> Signup and view all the answers

What is the function of money as a unit of account?

<p>It provides the terms in which prices are quoted and debts are recorded (D)</p> Signup and view all the answers

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