Question

Choose the correct order of money in terms of its evolution.

• A. Commodity money, Paper money, Metal money, Credit money
• B. Commodity money, Metal money, Paper money, Credit money
• C. Metal money, Commodity money, Credit money, Paper money
• D. Credit money, Metal money, Paper money, Commodity money

Answer 1

The correct option is B Commodity money, Metal money, Paper money, Credit money

Commodity money resolved the problems with the barter system by using commodities as a medium of exchange.

Metallic money was used as commodity money as it was durable, hard, and transportable.

Then came paper money or promissory notes that carried a particular value and were used as money. The money that we use today is plastic or credit money.