WorksheetsMoney and its Functions Test
Total questions: 25
Worksheet time: 13mins
Which statement best defines a barter system?
Direct exchange of goods without using money
Trading only with coins minted by states
Buying goods using credit issued by banks
Swapping services through online platforms
What problem does money solve compared with barter?
Eliminates double coincidence of wants in trade
Prevents any need for saving or investing
Stops prices from changing over time
Removes the role of sellers and buyers
Which function of money is being used when you pay $5 for a burrito?
Medium of exchange facilitating payment
Unit of measure setting government budgets
Store of value protecting against inflation
Commodity value of precious metal coins
A store lists apples at 2.20 per pound and oranges at $1.80 per pound. Which function of money does this illustrate?
Unit of measure enabling price comparison
Medium of exchange enabling quick payment
Store of value ensuring savings keep worth
Legal tender making taxes collectible
If you save 20% of each paycheck for one year to buy a car later, which function of money are you relying on?
Store of value maintaining purchasing power
Unit of measure setting market benchmarks
Medium of exchange reducing negotiation
Fiat authority guaranteeing metal content
Inflation rises sharply over a year. Which consequence directly challenges one function of money, and which function is it?
Reduced purchasing power challenges store of value
Higher prices challenge medium of exchange
Price volatility challenges unit of measure
Lower savings challenge commodity value
Which characteristic of money is best demonstrated by coins that resist scratches and paper bills that survive frequent handling?
Portability enables easy carrying everywhere
Durability allows withstanding wear and tear
Uniformity ensures identical look and value
Acceptability leads to wide public trust
What does divisibility allow people to do with money?
Use identical designs across all notes
Split value into smaller usable units
Keep supply fixed by central banks
Guarantee merchants must accept it
Which statement best distinguishes money from currency?
Money is only physical while currency is digital
Currency is the official form of money in use
Money is government-issued while currency is private
Currency is broader than money in definition
Central banks reduce the growth of the money stock to fight rising prices. Which characteristic are they protecting?
Divisibility into many denominations
Limited supply to preserve value
Portability through digital transfers
Durability of records over time
A street vendor accepts mobile payments and cash, while a tourist trusts both methods to buy snacks. Which two characteristics primarily enable this transaction to work smoothly?
Durability and divisibility together
Acceptability and portability together
Uniformity and limited supply together
Divisibility and uniformity together
What did the gold standard require a country's currency to be tied to at a fixed rate?
Silver reserves
Foreign currencies
A quantity of gold
Government bonds
Why does fiat currency have value even though it is not backed by gold or silver?
It contains rare metals inside
It is guaranteed and accepted by governments
It cannot be counterfeited at all
It always increases purchasing power
A government declares certain money acceptable for paying debts and taxes. Which term identifies this status?
Money supply
Intrinsic value
Legal tender
Commodity reserve
A country’s economy grows faster than its gold reserves under the gold standard. What is the most likely monetary consequence?
Money supply growth becomes constrained
Inflation automatically disappears
Fiat currency loses all value
Banks eliminate checking accounts
Suppose a central bank rapidly increases the money supply of a fiat currency. Which outcome is most plausible if trust declines?
Stable prices with higher trust
Lower prices and gold shortages
Rising prices due to inflation
Unlimited intrinsic value for cash
Which statement best defines legal tender in an economy?
Money officially recognized for settling debts
Money commonly used by local merchants
Money printed with historical portraits
Money accepted only by private banks
Which list shows common U.S. coin denominations? (Hint: the penny is still in circulation but no longer minted.)
1, 5, 10, and 25 cents
2, 4, 6, and 8 cents
30, 40, 50, and 60 cents
3, 9, 12, and 15 cents
A friend claims digital currency lacks the government's promise of value. What is the best response?
Digital entries still carry the same legal guarantee
Only paper bills include any enforceable guarantee
Coins alone are backed by central bank promises
Apps provide value through private company guarantees
Which situation most clearly shows a disadvantage of using cash?
Carrying large bills increases theft risk
Paying a neighbor for a used bike
Buying a snack at a school concession
Tipping at a small food truck stand
When writing a check, who is the payor and who is the payee?
Payor writes the check, payee receives funds
Payor receives funds, payee signs the check
Payor verifies identity, payee issues funds
Payor manages bank, payee approves account
Which term describes a check that is rejected because the account lacks enough money to cover it?
Forged check with altered details
Bounced check due to insufficient funds
Overdraft fee from negative balance
Electronic transfer through the ACH
A person needs to send a large payment that must arrive quickly the same day. Which method is most appropriate?
ACH batch transfer over one or two days
Paper check mailed to the payee
Wire transfer with faster delivery
Debit card cash withdrawal
Which statement best describes how a debit card works?
Spends from bank account immediately
Borrows from bank to repay later
Converts cash into store credit
Loads funds from credit score rating
A teen wants fraud protection and the chance to build a credit score. Which payment method aligns best with that goal if used responsibly?
Debit card with ATM access only
Credit card with timely payments
Prepaid gift card with limits
Cash with careful budgeting
