Term 1 Finance Test

Why did commodity money come to replace bartering as a system of money?

• Commodity money was more portable than bartering

• Bartering was outlawed by various emporers

• Commodity money allowed two parties to come together and trade

• Commodity money was a more effective medium of exchange

An example of fiat money used in the past include

• Shells

• Gold

• Silver

• Cows

• Coins

Commodity money differs from fiat money because

• Commodity money only has value because people value it

• The value of fiat money is solely based on the stability of the government

• Fiat money is backed by a government, not a commodity

• Commodity money is backed up by paper money

Which of the following best matches the functions of money?

• Medium of Exchange

• Unit of value

• Store of value

• Only A

• A and C

A hard currency is a type of currency which

• Relies on the government to give it value

• Money that is widely accepted throughout the world because it's based on gold

• Issued by a nation that is politically and economically stable

• Is better than fiat money because it has more value

Why do Spain and France have the same currency?

• Because they are both Mediterranean countries

• Their currencies derived from the Roman Empire

• Because they both used the reale

• They are both part of the Eurozone

• They are both economically stable countries

Which two countries both use the dollar as their currency?

• Australia and Mexico

• USA and Mexico

• USA and New Zealand

• New Zealand and Mexico

• New Zealand isn't a real country

What is NOT an example of an Authorised Deposit-Taking Institution?

• Commonwealth Bank

• People's Choice Credit Union

• Bendigo Bank

• Westpac

• RBA

What makes the RBA different from most banks in Australia?

• It sets fiscal policy for Australia

• It sets the cash rate

• It is responsible for circulating banknotes and coins in Australia

• It influences the interest rate through government policy

Which of these banks is not one of the 'Big Four' in Australia?

• Westpac

• Commbank

• Bank of Queensland

• ANZ

• All of these banks are part of the Big Four