Functions of Money Objective Questions (NCERT Based)
Functions of Money Objective Questions (NCERT Based)
Class: 12
Subject: Economics
Section: Money and Banking — Introductory Macroeconomics
Topic: Functions of Money Objective Questions (NCERT Based)
Subject: Economics
Section: Money and Banking — Introductory Macroeconomics
Topic: Functions of Money Objective Questions (NCERT Based)
Strictly Based on Latest NCERT Syllabus | CBSE Board Examinations
1. The primary function of money is:
Answer: B. Medium of exchange
Money’s most important role is to facilitate buying and selling. It removes the inconvenience of barter by acting as a common medium accepted by all.
Money’s most important role is to facilitate buying and selling. It removes the inconvenience of barter by acting as a common medium accepted by all.
2. Which function helps measure value in monetary terms?
Answer: B. Unit of account
Money provides a common measure to express prices, costs, and incomes, making economic calculations easier.
Money provides a common measure to express prices, costs, and incomes, making economic calculations easier.
3. Store of value function means:
Answer: B
People can save money and use it later. It preserves purchasing power over time.
People can save money and use it later. It preserves purchasing power over time.
4. Standard of deferred payment refers to:
Answer: A
Loans and credit transactions are settled in money, making deferred payments convenient.
Loans and credit transactions are settled in money, making deferred payments convenient.
5. Transfer of value function helps in:
Answer: B
Money enables easy transfer of value from one person/place to another.
Money enables easy transfer of value from one person/place to another.
6. Barter system lacked:
Answer: A
Barter required mutual wants, which money removed.
Barter required mutual wants, which money removed.
7. Which function removes double coincidence?
Answer: B
Money acts as an intermediary in exchange.
Money acts as an intermediary in exchange.
8. Price system depends on:
Answer: B
Prices are expressed in monetary units.
Prices are expressed in monetary units.
9. Wealth holding motive relates to:
Answer: B
Money preserves wealth for future use.
Money preserves wealth for future use.
10. Money facilitates credit through:
Answer: B
Loans are repaid in money.
Loans are repaid in money.
11. Measuring national income uses:
Answer: B
Income is measured in money terms.
Income is measured in money terms.
12. Future contracts depend on:
Answer: A
Payments are fixed in money.
Payments are fixed in money.
13. Salary payments show:
Answer: C
Work today, payment later.
Work today, payment later.
14. Bank transfers reflect:
Answer: A
Purchasing power moves electronically.
Purchasing power moves electronically.
15. Savings illustrate:
Answer: B
Money kept for future consumption.
Money kept for future consumption.
16. Rent payment shows:
Answer: A
Property service exchanged for money.
Property service exchanged for money.
17. Accounting books use:
Answer: B
All entries recorded in money.
All entries recorded in money.
18. Pension payments show:
Answer: A
Services rendered earlier, paid later.
Services rendered earlier, paid later.
19. Which is a secondary function?
Answer: C
Primary: exchange & unit. Secondary: store & deferred.
Primary: exchange & unit. Secondary: store & deferred.
20. Most liquid asset is:
Answer: C
Money can immediately purchase goods/services.
Money can immediately purchase goods/services.