Money and Its Functions Quiz

Which of the following is NOT a function of money?

• Medium of exchange

• Unit of account

• Store of value

• Measure of productivity

What is meant by money being a 'medium of exchange'?

• It can be saved and used later

• It is used to compare the value of different goods

• It is used to facilitate transactions between buyers and sellers

• It is used to measure inflation

When money is used to express the value of goods and services, it is functioning as a:

• Medium of exchange

• Store of value

• Unit of account

• Barter system

What role does money play when it is saved for future purchases?

• Unit of account

• Store of value

• Medium of exchange

• Measure of wealth

Which of the following best describes 'fiat money'?

• Money backed by gold or silver

• Money that has value because of government regulation

• Money that is only used in digital form

• Money that is used in bartering

How does inflation affect the purchasing power of money?

• Increases purchasing power

• Decreases purchasing power

• Has no effect on purchasing power

• Stabilizes purchasing power

Which of the following is an example of 'commodity money'?

• A credit card

• A check

• A gold coin

• A banknote

What is the primary purpose of a central bank in the context of money?

• To provide loans to individuals

• To issue currency and regulate the money supply

• To distribute wealth equally among citizens

• To set tax rates

Which of the following describes a 'unit of account' function of money?

• Money provides a means of comparing the relative value of goods and services

• Money can be used to purchase goods and services

• Money maintains its value over time

• Money is used to barter between parties

What characteristic is crucial for money to effectively function as a store of value?

• Portability

• Durability

• Divisibility

• Fungibility