i4. It product preces were staled·n terms ot tobacco leaves, then tobacco leaves
ID: 1128655 • Letter: I
Question
i4. It product preces were staled·n terms ot tobacco leaves, then tobacco leaves would be tuncto ning primarily as A. Fiat money I. Legal tender C. A store of value D. A unit of account 35, Money functions as a store of value if it allows you to: A. Measure the value of goods in a reliable way B Make exchanges in rmore efficient manner C. Delay purchases until you want the goods D. Increase your confidence in money 36. Orensa or advantage of money serving as a melium ofexchange is that it allows society to: A. Transfer purchasing power from the present to the future B. Measure the relative worth of products C. Escape the complications of barter D. Use credit cards instead of currency 37 Money eliminates the need for a coincidence of wants in trading primarily through its role as a: A. Unit of account B. Medium of exchange C. Store of value D. Medium of deferred payment 38. An asset's liquidity refers to its ability to be: A. Bought and stored B. Increasing in value over time C. Used and enjoyed D. A means of payment 39. The currency or money of the United States, like those of other countries, is: A. Commodity money B. Intrinsic money C. Token money D. Deposit money 40. Paper money or currency in the U.S. is essentially: A. A debt of commercial banks and savings institutions B. A debt of a govemment agency C. An asset of the Federal government D. An asset of commercial banks and savings institutions 41. Checkable deposits are: A. Debts of commercial banks and savings institutions B. Debts of the Federal government and government agencies C. Assets of the Federal government and government agencies D. Assets of commercial banks and savings institutions 42. An increase in nominal GDP will: A. Increase the transactions demand and total demand for money B. Decrease the transactions demand and total demand for money C. Increase the transactions demand for money but decrease the total demand for money D. Decrease the transactions demand for money but increase the total demand for moneyExplanation / Answer
34. The correct answer is: d)
Reason: By definition, money as a unit of account can be used to represent the real cost or value of other goods and services transacted in an economy.
35. The correct answer is: c)
Reason: By definition, money can be used as a store of value which implies that money can be stored and can be used to pay for goods and services at some future date.
36. The correct answer is: c)
Reason: Money serves as a medium of exchange which solves the complications of the barter system like double coincidence of wants, etc.
37. The correct answer is: b)
Reason: Money serves as a medium of exchange which solves the complications of the barter system like double coincidence of wants, etc.
38. The correct answer is: d)
Reason: Liquidity of an asset is mainly concerned with its ability to make payments as and when required.
39. The correct answer is: c)
Reason: Almost all countries uses what is called token money which the money whose face value is unrelated to the value of the material of which they are made up of.
40. The correct answer is: b)
Reason: The paper money is issued by the Federal Bank of US which is essentially debt of government agency.
41. The correct answer is: a)
Reason: Checkable deposits are a liability to the commercial banks and savings institutions. HEnce, they can be considered as a debt.
42. The correct answer is: a)
Reason: An increase in nominal GDP will increase both transaction demand for money and speculative demand for money and thus the total demand for money.
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