Functions of Money Quiz

Which of the following is NOT a function of money?

• Medium of exchange

• Standard of value/Unit of Account

• Store of value

• Source of income

What is required for something to be considered a medium of exchange?

• It must be rare and valuable.

• It must be accepted as payment for goods and services.

• It must be made of metal.

• It must be issued by a government.

Why can't M&Ms be considered money according to the text?

• They are not durable.

• They are not divisible.

• No one is willing to accept them as money.

• They are not portable.

What is a good standard of value according to the text?

• Money

• Barter system

• Gold

• Chickens

Why is money considered a good measure of value?

• It is universally accepted

• It is easy to carry

• It expresses worth in understandable terms

• It is made of precious metals

What is meant by the term "store of value" in the context of money?

• Money must be spent immediately.

• Money can be used to buy labor.

• Money can be stored and used later.

• Money loses value over time.

What does the term "liquidity" refer to in financial terms?

• The interest rate of a loan

• The ease of turning assets into spendable cash

• The value of a property

• The amount of debt a person has

Which of the following is more liquid?

• A house

• A savings account

• A piece of art

• A car

Which of the following is a type of lender?

• Banks

• Insurance Companies

• Real Estate Agents

• Investment Firms

What are banks primarily described as in the document?

• Non-profit organizations

• Profit-seeking entities for stockholders' benefit

• Government agencies

• Charitable institutions