Money

Which of the following is NOT a function of money?

• Medium of exchange

• Store of value

• Barter system

• Unit of account

Answer explanation

The barter system is not a function of money; it is an alternative method of trade that does not involve money. Money serves as a medium of exchange, store of value, and unit of account, unlike the barter system.

What characteristic of money ensures that a €1 coin always holds the same value as another €1 coin?

• Uniformity

• Acceptability

• Portability

• Divisibility

Answer explanation

Uniformity ensures that each €1 coin is identical in size, weight, and appearance, guaranteeing that one €1 coin always holds the same value as another. This characteristic is essential for maintaining trust in the currency.

If a country prints too much money, what economic problem could arise?

• Deflation

• Hyperinflation

• Barter System

• Increased Savings

Answer explanation

Printing too much money can lead to hyperinflation, where prices rise rapidly as the currency loses value. This occurs because an excess supply of money decreases its purchasing power, causing inflation to spiral out of control.

Which of the following is an example of a form of money that operates digitally?

• Gold Coins

• Cryptocurrency

• Cash

• Bartering

Answer explanation

Cryptocurrency is a form of money that exists only in digital form, unlike gold coins, cash, or bartering, which are physical or traditional methods of exchange.

Which type of money is easiest to transport?

• 50 kg of wheat

• A cow

• A gold bar

• A €50 note

Answer explanation

A €50 note is the easiest to transport because it is lightweight and compact compared to 50 kg of wheat, a cow, or a gold bar, which are all bulky and heavy.