Money and Financial System CDS Questions

CDS Economy

Money and Financial System MCQ Questions


1.
The primary (most important) function of money is to act as a:
A.
Store of value
B.
Standard of deferred payment
C.
Medium of exchange
D.
Unit of account
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ANSWER :
C. Medium of exchange
2.
The barter system suffers primarily from the problem of:
A.
Lack of a central bank
B.
Excess supply of goods
C.
Double coincidence of wants
D.
High rate of interest
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ANSWER :
C. Double coincidence of wants
3.
When the value of all goods and services is expressed in monetary units, money is performing the function of:
A.
Medium of exchange
B.
Unit of account
C.
Store of value
D.
Standard of deferred payment
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ANSWER :
B. Unit of account
4.
Money allows wealth to be carried forward to the future. This refers to its function as a:
A.
Unit of account
B.
Medium of exchange
C.
Standard of deferred payment
D.
Store of value
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ANSWER :
D. Store of value
5.
Which of the following is NOT considered a function of money?
A.
Medium of exchange
B.
Maximisation of profit of banks
C.
Store of value
D.
Unit of account
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ANSWER :
B. Maximisation of profit of banks
6.
'Standard of deferred payment' as a function of money means that money:
A.
Cannot be stored for future use
B.
Is used to express future or postponed payments such as loans and salaries
C.
Has no role in lending and borrowing
D.
Is only used for spot transactions
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ANSWER :
B. Is used to express future or postponed payments such as loans and salaries