Functions of Money

Q.

How is quantitative credit control different from qualitative credit control?

Q.

Explain the 'Unit of Account' function of money. How has it solved the related problem created by the barter system?

Q.

What are the main functions of money? How does money overcome the shortcomings of a barter system?

Q.

Explain the 'standard of deferred payment' function of money. How has it solved the related problem created by the barter system?

Q.

The primary function of money is:

1. transfer of value

2. measure of value

3. medium of exchange

4. both (b) and (c)

Q.

What do you mean by money?

Q.

What is transaction demand for money? How is it related to the value of transactions over a specified period of time?

Q.

Explain how the introduction of money has led to the expansion of markets.

Q.

Money as a standard for deferred payments has led to the emergence of:

1. financial market

2. both (a) and (b)

3. commodity market

4. none of these

Q.

How, in your opinion, has credit creation by the commercial banks accelerated the pace of economic growth? Write two observations.

Q.

Can you think of a situation when money plays no role whatsoever?

Q.

Explain the advantages of 'store of value' function of money.

OR

Explain the significance of 'medium of exchange' function of money.

Q.

What are the basic elements of the capital market?

Q.

Introduction of money has:

1. separated the acts of sale and purchase of an individual

2. expanded the scope of sale and purchase

3. both (a) and (c)

4. combined the acts of sale and purchase of an individual

Q. Distinguish between intermediate product and final product. Give suitable examples in support of your answer.

Q. Which is the most liquid measure of money supply?

1. $M_1$
2. $M_3$
3. $M_4$
4. $M_2$

Q.

As a standard of deferred payment, money:

1. Allows a common standard for comparison

2. Allows debt to be transferred to later periods

3. Is portable

4. All of the above

Q. Who defined 'Money is what it does'?

1. Crowther
2. Robertson
3. Walker
4. None of these

Q. Define the term 'money'. Explain its utility as a standard of deferred payment, in assisting production decisions and measure of value.

Q.

The function by which money acts as a standard measure of market value for goods, services and other transactions is called ___.

Q.

Explain how money is a better substitute to barter system as a standard of deferred payments?

Q.

What is a barter system? What are its drawbacks?

Q. Explain the Primary and Secondary functions of Money.

Q. Which of the following methods cannot be used as an instrument of Quantitative Control of credit by the Central Bank?

1. Bank Rate Policy
2. Open Market Operations
3. Change in Margin Requirements
4. Changes in Reserve Requirements

Q. Distinguish between:
Final goods and intermediate goods

Q. Bread can either be a consumer good or an intermediate good.

1. True
2. False

Q. Precautionary money balance is needed due to _________.

1. uncertainty of receipt of income and expenditure
2. conservative nature of human being
3. desire to be not out of money
4. expectation of good investment opportunities

Q.

The value of a cow today is the same as its value one year from now. Which of the following functions does the cow serve?

1. Medium of exchange

2. Store of value

3. Unit of account

4. Standard of deferred payments

Q. Which of these Industries falls in the category of capital goods industry?

1. Mineral
2. Coal
3. Petroleum
4. Machine

Q.

What does money effectively do?

1. Allow people to become rich

2. Separate sale and purchase

3. Merged sale and purchase

4. Eliminate double coincidence of wants