Question

What are the factors responsible for the change in the form of money?

• A. Political factors
• B. Economic factors
• C. Government factors
• D. All of the above

Answer 1

Answer: (D)

All of the above

Money refers to an asset in the economy that acts as a common medium of exchange issued under the law of government and acts as a legal tender for the whole country. The factors which are responsible for the change in the form of money are as follows:

(i) Political factors: Political factors refers to all such types of political activities that changes the form of money like political campaigning, political services etc. which leads to purchase of goods and services.

(ii) Economic factors: It refers to those factors that leads to exchange of goods and services against money in the market. Such factors include consumption, production etc.

(iii) Governmental factors: These factors include government expenditure, selling and buying of bonds by the government on the open market, providing subsidies to the poor which changes the form of money into various other things.