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Money: Features, Functions and Money Supply

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2016 CSEC Economics (Section 5 - Financial Sector) Quiz on Money: Features, Functions and Money Supply, created by Nikolas Reece on 20/05/2016.
Nikolas Reece
Quiz by Nikolas Reece, updated more than 1 year ago
Nikolas Reece
Created by Nikolas Reece over 8 years ago
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Resource summary

Question 1

Question
Divisibility is an important function of money because it
Answer
  • Encourages the process of specialisation
  • Removes the problems associated with barter
  • Enables small transactions to take place
  • Assists individuals to allocate wealth in a profitable manner

Question 2

Question
Justin takes ½ of his salary every month an purchases shares in the credit union in order to later purchase a sports car. Which function of money is this ½ of his salary performing?
Answer
  • A medium of exchange
  • A standard of deferred payment
  • A store of value
  • A standard of deferred exchange

Question 3

Question
Rob and Steele joined an underground group who were printing counterfeit money. Which quality of money is the group eroding?
Answer
  • Durability
  • Portability
  • Authenticity
  • Acceptability

Question 4

Question
Which of the following is NOT a function of money?
Answer
  • Unit of account
  • Form of credit
  • Store of value
  • Medium of exchange

Question 5

Question
What is money?
Answer
  • Notes and coins only
  • Cheques and debit cards only
  • Anything that is acceptable as a means of settling debts
  • Anything the seller pays to settle a debt

Question 6

Question
Which of the following is NOT a feature of money?
Answer
  • Portability
  • Uniformity
  • Divisibility
  • Suitability

Question 7

Question
What is the definition of 'broad' money?
Answer
  • Notes, coins, all chequing accounts and travellers’ cheques
  • Notes and coins plus savings deposits and money market accounts
  • M1 plus money market accounts only
  • M1 plus savings deposits and money market accounts.

Question 8

Question
Which of the following is NOT considered to be classified as narrow money
Answer
  • Savings deposit
  • Notes and coins
  • Chequing deposits
  • Fiat money

Question 9

Question
An informal arrangement where a small group of people contribute an equal fixed sum to a common fund is called
Answer
  • Money lender
  • Soufflé
  • Subsidies
  • Sou Sou

Question 10

Question
Which characteristic of money is crucial for it to be used as a medium of exchange?
Answer
  • Durability
  • Intrinsic value
  • Legal tender
  • Limited in supply

Question 11

Question
Money can be easily acquired and disposed of without high costs and with relative certainty as to its value. Which characteristic of money does this describe?
Answer
  • Acceptability
  • Durability
  • Liquidity
  • Purchasing power

Question 12

Question
The exchange of goods and services for other goods and services is known as:
Answer
  • Sou Sou
  • Credit
  • Barter
  • Bartender

Question 13

Question
In order for exchange to take place, there must be a
Answer
  • Double market
  • Double coincidence of wants
  • Double exchange
  • Doubles

Question 14

Question
Which of the following items will NOT be considered commodity money
Answer
  • Livestock
  • Gold
  • Silver
  • Paper money

Question 15

Question
“A monetary system where a country's currency or paper money has a value directly linked to gold” This statement above is called the:
Answer
  • The Golden Rule
  • The Gold Standard
  • International Gold
  • The Gold System

Question 16

Question
"The Republic of Plentidolla in Eurpoe attempted to solve its economic issue by printing and distributing double the amount of money it now has, leading to greater economic problems" Which feature of money does this describe:
Answer
  • Stability
  • Acceptability
  • Durability
  • Portability

Question 17

Question
TV-Mart had a one day 50% sale on 60 inch Samsung flat screens. There was one last TV in store and Frank N Stein went to purchase it via cheque, however, the cashier refused to accept it and sold it to the person behind him for cash. What would have been the feature of Frank's payment by cheque that did not allow him to buy the TV.
Answer
  • He did not sign the cheque
  • It was not legal tender
  • Cash is more valuable than cheques
  • The cheques were not durable

Question 18

Question
A pair of shoes for $100 is worth four times as much as a cap. This function deals with the price of items
Answer
  • A medium of exchange
  • Store of value
  • Unit of account
  • Method of deferred payment

Question 19

Question
Trade is facilitated because money is acceptable
Answer
  • A medium of exchange
  • Store of value
  • Unit of account
  • Method of deferred payment

Question 20

Question
My flat screen tv can be bought on hire purchase
Answer
  • A medium of exchange
  • Store of value
  • Unit of account
  • Method of deferred payment

Question 21

Question
It can be accumulated and used to purchase a car in 3 years.
Answer
  • A medium of exchange
  • Store of value
  • Unit of account
  • Method of deferred payment

Question 22

Question
The total stock of money in the economy at a particular time is referred to as
Answer
  • The Central Bank Supply
  • Economic Liquidity
  • The Money Supply
  • Economic Supply
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