Characteristics and Functions of Money

Which of the following is NOT a characteristic of money?

• Portable

• Durable

• Easily counterfeited

• Divisible

What is the primary function of money as a medium of exchange?

• To store value over time

• To facilitate transactions between buyer and seller

• To measure unit of account

• To settle debt

Which type of financial market involves the buying and selling of currencies?

• Money market

• Capital market

• Foreign exchange market

• Stock market

What does M1 represent in terms of money supply?

• Broad money

• Narrow money

• Digital money

• Capital market

Which financial asset represents ownership in a company?

• Bonds

• Mutual funds

• Stocks

• Derivatives

What is digital money primarily used for?

• Physical currency transactions

• Barter trade

• Electronic transactions

• Gold exchange

What is the main goal of a financial market?

• To increase government revenue

• To match buyers and sellers to allocate financial capital efficiently

• To regulate international trade

• To provide free financial services

Which of the following is a key role of financial markets?

• To provide free education

• To facilitate saving by businesses and households

• To increase tax rates

• To control inflation

What is the relationship between market interest rates and bond prices?

• Direct relationship

• Inverse relationship

• No relationship

• Exponential relationship

What does equity represent in a company?

• A loan with fixed interest

• Ownership and a share of profits

• A government bond

• A type of insurance