I.Choose the best answer
1. Money is what itdoes is defined by
a) Crowther b)walker c) Robertson
2. The purchasingpower of money depends upon the
a) Price level b)demand level c) supply level
3. _________ isused as a standard for future payment
a) cheque b) Moneyc) Credit card
II.Fill in the blanks:
1. ___________ isone of the greatest inversions of money.
2. The word “money”is derived from the Latin word___________.
3. The most importantfunction of money is that it acts as ___________.
4. Money is aconvenient from of storing one’s ________ .
5. ____________ isinevitable for capital formation and economic growth.
6. ____________ isthe medium of exchange.
7. The directexchange of goods for goods is known as _________ system.
8. Moneta is thesurname of Roman Goddess_____________.
9. Moneta is a__________ word.
10. The purchasingpower of money depends upon the __________.
11. The rupee is ablend of the Devangiri ___________ and Roman ____________.
12. ___________ isnothing but value expressed in terms of money.
13. The portion ofincome not spent on consumption is called__________.
14. The additionmade to the existing production and capacities is called __________.
III.Match the following
1. Moneta – oldsystem of exchange of goods
2. Store of value –fundamental invention
3. Savings – Money
4. Money – functionof money
5. Barter system –contributes to economic growth
IV.Brief answer
1.Money serves as a store of wealth explain.
i) Money is aconvenient form of storing one’s wealth.
ii) Money can beeasily converted into other marketable assets and machinery, industries andgold.
2. Write briefly about the importance of money
i) Money plays animportant role in the economic development of a country.
ii) Modern economycannot function smoothly without money.
iii) The importanceof money can be realized only in its absence.
iv) Money is only ameans and not an end in itself.
3. Explain the barter system
i) The bartersystem is exchange of goods for goods.
ii) It is thesystem of trading without the use of money.
iii) But it hadmany difficulties and in convenience. These difficulties led to the inventionof money.
4. Explain the standard and deferred payment.
i) Money is usedfor standard and deferred payment.
ii) Business inmodern times is based on “Credit” to a large extent.
iii) In credit,payments are made at a future date, money is the standard.
iv) If the credittransactions were to be carried on the basis of commodities, it would lead todifficulties. It will affect trade.
5.Define savings and Investments:
Savings
The portions ofincome not spent on consumption is called investment.
Investments
Investment includefixed equipments, machinery, building, raw material, replacement due todepreciation etc.,
V.Answer in detail
1)Describe the functions of money
Money performs manyfunction in the modern economy.
The most importantfunctions of money etc.,
a) medium ofexchange
b) measure of value
c) store of value
d) standarred ofdeferred payments
Medium of exchange
i) The mostimportant function of money is that it acts as medium of exchange.
ii) Money isaccepted freely in exchange for all other goods.
Measure of value
i) It is a unit ofaccount and a standard of common measurement
ii) is nothing butvalue expressed in terms of money.
iii) We use moneyfor measuring value of goods. It makes economic calculation easy.
Store of value
i) Money is aconvenient form of storing one’s wealth.
ii) Money alsoserves an excellent store of wealth as it can be easily converted into othermarketable assets such as land, machinery, industries and gold.
Standard ofdeferred payments
i) Money is usedfor standard for future payments.
ii) Business inmodern lines is based on credit to a large extent.
iii) In credit,payments are made at a future date, money is the standard.
iv) if credittransactions were to be carried on the basis of commodities, it would lead todifficulties. It will affect trade.
2.Discuss significance of money?
i) Every branch ofeconomic activity in a money economy is different from what it was in bastereconomy.
ii) Money hasinfluenced and facilitated from what it was in the buster economy.
iii) Money plays animportant role in the field of consumption, production, exchange, distributionand public finance.
iv) Money plays animportant role in the economic government of a country.
v) Modern economycannot function smoothly without money.
vi) The importanceof money can be realized only in its absence.
3.Write in detail about savings and investment savings?
The portion ofincome not spent on consumption is called savings.
Investment
i) The additionmade to the existing production capacities is called investment.
ii) Investmentinclude equipments, machinery, building, raw material, replacement due todepreciation etc.,
Savings and Investment are related to another
i) Savings isinevitable for capital formation and economic growth.
ii) Savings isdirectly connected with investment.
iii) Savings andinvestment are basic economic activities in an economy.
iv) Saving andinvestment increase the amount on capital, which contributes the economicgrowth.
Savings and investments differ from one another
i) Savings andinvestment are in the hands of two distinct groups of people
ii) Savings is doneby the consumer
iii) Investment isthe functions of entrepreneurial class.
iv) The motives forsaving and investment are also different from each other.