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All questions of Meaning and Functions of Money for Class 10 Exam
What is a common challenge associated with using goods as a medium of exchange?- a)Goods can be easily stored
- b)Goods are universally accepted
- c)Goods can be indivisible
- d)Goods are always in demand
Correct answer is option 'C'. Can you explain this answer?
What is a common challenge associated with using goods as a medium of exchange?
a)
Goods can be easily stored
b)
Goods are universally accepted
c)
Goods can be indivisible
d)
Goods are always in demand
|
Nk Classes answered |
Many goods are indivisible, meaning that they cannot be easily split into smaller units for trade, which complicates transactions. Money resolves this issue by providing a flexible medium of exchange.
Which form of money was used in ancient times and involved various commodities?- a)Fiat Money
- b)Bank Money
- c)Commodity Money
- d)Metallic Money
Correct answer is option 'C'. Can you explain this answer?
Which form of money was used in ancient times and involved various commodities?
a)
Fiat Money
b)
Bank Money
c)
Commodity Money
d)
Metallic Money
|
Kamna Science Academy answered |
Commodity money is the earliest form of money, where actual goods were used as a medium of exchange. This form had its challenges, such as the inability to standardize value and difficulties in storage and divisibility.
How does money contribute to economic stability?- a)By limiting trade
- b)By hindering capital flow
- c)By increasing barter transactions
- d)By facilitating wealth accumulation
Correct answer is option 'D'. Can you explain this answer?
How does money contribute to economic stability?
a)
By limiting trade
b)
By hindering capital flow
c)
By increasing barter transactions
d)
By facilitating wealth accumulation
|
|
Nk Classes answered |
Money aids in economic stability by allowing individuals and businesses to accumulate wealth, which can then be invested back into the economy, fostering growth and reducing uncertainty.
What is a key characteristic of fiat money?- a)It is enforced by law
- b)It has intrinsic value
- c)It is always convertible to gold
- d)It is backed by physical commodities
Correct answer is option 'A'. Can you explain this answer?
What is a key characteristic of fiat money?
a)
It is enforced by law
b)
It has intrinsic value
c)
It is always convertible to gold
d)
It is backed by physical commodities
|
EduRev Class 10 answered |
Fiat money is not backed by a physical commodity but is considered legal tender by governmental decree. Its value is derived from the trust and acceptance of those who use it.
In terms of economic development, what role does money play in capital flow?- a)It enables investment and trade
- b)It has no impact on capital flow
- c)It complicates transactions
- d)It restricts movement of capital
Correct answer is option 'A'. Can you explain this answer?
In terms of economic development, what role does money play in capital flow?
a)
It enables investment and trade
b)
It has no impact on capital flow
c)
It complicates transactions
d)
It restricts movement of capital
|
|
Nk Classes answered |
Money plays a crucial role in enabling the flow of capital, allowing for investments in various sectors of the economy, which is essential for growth and development.
Which of the following best describes the concept of "near money"?- a)Commodity money
- b)Bank deposits easily convertible to cash
- c)Currency notes and coins
- d)Time deposits with fixed maturity
Correct answer is option 'B'. Can you explain this answer?
Which of the following best describes the concept of "near money"?
a)
Commodity money
b)
Bank deposits easily convertible to cash
c)
Currency notes and coins
d)
Time deposits with fixed maturity
|
|
EduRev Class 10 answered |
Near money refers to assets that are not cash but can be quickly converted into cash, such as bank deposits. This liquidity makes it an important aspect of financial transactions.
What does the narrow definition of money (M1) include?- a)Only physical currency
- b)Time deposits and currency
- c)Demand deposits and savings accounts
- d)Currency and demand deposits
Correct answer is option 'D'. Can you explain this answer?
What does the narrow definition of money (M1) include?
a)
Only physical currency
b)
Time deposits and currency
c)
Demand deposits and savings accounts
d)
Currency and demand deposits
|
|
EduRev Class 10 answered |
The narrow definition of money, M1, includes physical currency in circulation and demand deposits with commercial banks, both of which are immediately accessible for transactions.
Which of the following describes the lack of deferred payment in the barter system?- a)It allows for future exchanges
- b)It requires immediate exchange of goods
- c)It enables the storing of wealth
- d)It facilitates long-term contracts
Correct answer is option 'B'. Can you explain this answer?
Which of the following describes the lack of deferred payment in the barter system?
a)
It allows for future exchanges
b)
It requires immediate exchange of goods
c)
It enables the storing of wealth
d)
It facilitates long-term contracts
|
|
Kamna Science Academy answered |
The barter system requires that exchanges occur simultaneously, meaning that no deferred payments are possible. Money allows for transactions to occur without immediate delivery of goods.
Why is divisibility an important feature of money?- a)It allows for the exchange of different values
- b)It can be easily transported
- c)It remains stable over time
- d)It is universally recognizable
Correct answer is option 'A'. Can you explain this answer?
Why is divisibility an important feature of money?
a)
It allows for the exchange of different values
b)
It can be easily transported
c)
It remains stable over time
d)
It is universally recognizable
|
|
Kamna Science Academy answered |
Divisibility is crucial because it enables the exchange of goods and services of varying values. This feature ensures that transactions can occur at appropriate amounts without requiring whole units.
Which of the following features of money ensures that it can be easily recognized?- a)Durability
- b)Cognisability
- c)Divisibility
- d)Portability
Correct answer is option 'B'. Can you explain this answer?
Which of the following features of money ensures that it can be easily recognized?
a)
Durability
b)
Cognisability
c)
Divisibility
d)
Portability
|
|
Kamna Science Academy answered |
Cognisability refers to the ease with which money can be recognized, which helps prevent confusion and fraud in transactions. Distinct features and designs are essential for this purpose.
What is one of the contingent functions of money concerning production decisions?- a)It allows for future contracts
- b)It helps in the immediate exchange of goods
- c)It determines the market for goods
- d)It provides a measure for production costs
Correct answer is option 'D'. Can you explain this answer?
What is one of the contingent functions of money concerning production decisions?
a)
It allows for future contracts
b)
It helps in the immediate exchange of goods
c)
It determines the market for goods
d)
It provides a measure for production costs
|
|
EduRev Class 10 answered |
Money plays a role in production decisions by providing a standard measure for production costs, guiding producers on how much of each production factor to utilize based on profitability.
What type of money involves demand deposits with commercial banks?- a)Fiat Money
- b)Metallic Money
- c)Commodity Money
- d)Bank Money
Correct answer is option 'D'. Can you explain this answer?
What type of money involves demand deposits with commercial banks?
a)
Fiat Money
b)
Metallic Money
c)
Commodity Money
d)
Bank Money
|
|
Kamna Science Academy answered |
Bank money refers to demand deposits that can be accessed through cheques, making it a highly liquid form of currency. This form allows for transactions without the need to carry physical cash.
What defines the "broad definition" of money (M2)?- a)Currency and demand deposits
- b)M2 plus treasury bills
- c)M1 plus savings deposits
- d)Time deposits only
Correct answer is option 'C'. Can you explain this answer?
What defines the "broad definition" of money (M2)?
a)
Currency and demand deposits
b)
M2 plus treasury bills
c)
M1 plus savings deposits
d)
Time deposits only
|
|
Nk Classes answered |
The broad definition of money (M2) includes M1 (currency and demand deposits) along with savings deposits, which provides a wider view of money supply in the economy.
What is one significant advantage of using paper money over metallic money?- a)It has intrinsic value
- b)It is heavier and more durable
- c)It can be easily standardized and produced
- d)It is less accepted by the public
Correct answer is option 'C'. Can you explain this answer?
What is one significant advantage of using paper money over metallic money?
a)
It has intrinsic value
b)
It is heavier and more durable
c)
It can be easily standardized and produced
d)
It is less accepted by the public
|
|
EduRev Class 10 answered |
Paper money can be produced in standardized forms, making it easier to manage and distribute compared to metallic money, which poses challenges in terms of weight and handling.
Which of the following is a disadvantage of the barter system?- a)It allows for deferred payments
- b)It requires a double coincidence of wants
- c)It provides a stable measure of value
- d)It is universally accepted
Correct answer is option 'B'. Can you explain this answer?
Which of the following is a disadvantage of the barter system?
a)
It allows for deferred payments
b)
It requires a double coincidence of wants
c)
It provides a stable measure of value
d)
It is universally accepted
|
|
Kamna Science Academy answered |
The barter system struggles with a double coincidence of wants, meaning that both parties must have what the other desires at the same time, which complicates trade. This limitation led to the development of money.
What is one of the principal challenges of storing wealth in goods rather than money?- a)Goods are universally accepted
- b)Goods can be easily divided
- c)Goods can lose value over time
- d)Goods are durable and portable
Correct answer is option 'C'. Can you explain this answer?
What is one of the principal challenges of storing wealth in goods rather than money?
a)
Goods are universally accepted
b)
Goods can be easily divided
c)
Goods can lose value over time
d)
Goods are durable and portable
|
|
EduRev Class 10 answered |
Storing wealth in goods is risky because the value of these goods can fluctuate, and they may also incur storage costs, making them less practical for wealth preservation compared to money.
Which type of money is characterized by the ability to be withdrawn using cheques?- a)Bank Money
- b)Fiat Money
- c)Near Money
- d)Commodity Money
Correct answer is option 'A'. Can you explain this answer?
Which type of money is characterized by the ability to be withdrawn using cheques?
a)
Bank Money
b)
Fiat Money
c)
Near Money
d)
Commodity Money
|
|
Nk Classes answered |
Bank money is characterized by demand deposits that can be accessed via cheques, allowing for a flexible and convenient means of transaction in everyday life.
What is the significance of money in the context of wealth accumulation?- a)It has no role in wealth management
- b)It promotes barter exchanges
- c)It complicates financial transactions
- d)It allows for easier savings and investment
Correct answer is option 'D'. Can you explain this answer?
What is the significance of money in the context of wealth accumulation?
a)
It has no role in wealth management
b)
It promotes barter exchanges
c)
It complicates financial transactions
d)
It allows for easier savings and investment
|
|
EduRev Class 10 answered |
Money facilitates the process of saving and investing, allowing individuals to accumulate wealth over time more efficiently than if they were to rely on goods or barter systems.
What is the primary function of money as a medium of exchange?- a)To facilitate the exchange of goods and services
- b)To store value over time
- c)To measure the value of goods
- d)To serve as a standard for deferred payments
Correct answer is option 'A'. Can you explain this answer?
What is the primary function of money as a medium of exchange?
a)
To facilitate the exchange of goods and services
b)
To store value over time
c)
To measure the value of goods
d)
To serve as a standard for deferred payments
|
|
Kamna Science Academy answered |
Money acts as a medium of exchange by enabling transactions without the need for a direct barter of goods. This simplifies trade, as individuals can buy and sell without needing to find someone who wants what they have to offer, thus fostering economic activity.
Which of the following is NOT a primary function of money?- a)Medium of exchange
- b)Quality of goods
- c)Store of value
- d)Measure of value
Correct answer is option 'B'. Can you explain this answer?
Which of the following is NOT a primary function of money?
a)
Medium of exchange
b)
Quality of goods
c)
Store of value
d)
Measure of value
|
|
Kamna Science Academy answered |
The primary functions of money are to act as a medium of exchange, a measure of value, and a store of value. Quality of goods relates to the attributes of products rather than the functions of money.
Chapter doubts & questions for Meaning and Functions of Money - Economics Class 10 ICSE 2025 is part of Class 10 exam preparation. The chapters have been prepared according to the Class 10 exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for Class 10 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.
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Economics Class 10 ICSE
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