Functions of Money - 2

What are secondary functions of money also known as?

• Basic functions

• Core functions

• Optional functions

• Derivative functions

What does the standard of deferred payment refer to?

• Barter payments

• Paying in cash only

• Payments made in the future

• Interest-free loans

Which of the following does money encourage as a standard of deferred payment?

• Barter exchange

• Trade deficit

• Immediate payment

• Lending and borrowing

Which is NOT a benefit of deferred payments?

• Easier credit system

• Simplified barter

• Capital formation

• Growth of financial institutions

How has money contributed to the formation of financial institutions?

• By replacing labor

• By facilitating deferred payments

• By increasing taxes

• By limiting saving

Money as a store of value allows individuals to:

• Spend only on services

• Store wealth economically

• Avoid using banks

• Ignore inflation

Which quality of money makes it easy to store for future use?

• Universal acceptability

• High volume

• Expiry date

• Non-portability

What problem does storing goods instead of money create?

• Inflation

• High durability

• Perishability and high cost

• Low cost

What function of money enables transferring purchasing power to the future?

• Barter

• Medium of exchange

• Store of value

• Unit of production

Why is saving money more secure than saving goods?

• Money is perishable

• Goods can’t be traded

• Money is easier to hide

• Money is portable and acceptable