Chapter Based Questions: Key Characteristics of Money | Introduction to Financial Markets for Class 9 PDF Download

Q.1. Choose the correct answer.

(i) The most important criterion for anything to serve as money is
(a) it should be readily available
(b) it must be readily acceptable
(c) it should be a coin 

Correct Answer is Option (b)

(ii) One of our goals in saving is to ensure that the value of our savings doesn’t
(a) decrease over time
(b) increase over time
(c) have no value over time

Correct Answer is Option (a)

(iii) Money must not be easily reproduced by people and should be
(a) readily available
(b) easily produced in abundance
(c) relatively scarce 

Correct Answer is Option (c)

(iv) Which of the following is one of the characteristics of money? 
(a) Easily reproducible by people.
(b) Unlimited value
(c) Divisible into usable quantities.

Correct Answer is Option (c)

Q.2. Fill in the blanks.

(i) An effective medium of exchange must be ______.
(ii) Rather than using money for spending today, it can be ______ for use in the future.
(iii)  Money must be ______ into usable quantities or fractions.
(iv) Money helps to simplify the ______ process.

(i) Durable
(ii) Saved
(iii) Divisible
(iv) exchange

Q.3. Match the following.

(i) Unit of account - long lasting
(ii) Medium of exchange - Usable quantities
(iii) Durable - standard of value
(iv) Relatively scarce - Readily acceptable
(v) Divisible - difficult to produce in abundance

(i) Unit of account - Standard of Value
(ii) Medium of exchange - Readily Acceptable
(iii) Durable - Long Lasting
(iv) Relatively scarce - Difficult to produce in abundance
(v) Divisible - Usable quantities

Q.4. True or False.

(i) Money is not a common item in which the prices of all goods and services cannot be set.
(ii) Commodity money cannot be saved for the future.
(iii) Money serves as a standard of value.
(iv) Money as a medium of exchange today has taken the form of paper currency and coins.

(i) False
(ii) False
(iii) True
(iv) True

Q.5. Answer the following briefly.

1. What is meant by the medium of exchange?

Ans: A medium of exchange is anything that is widely accepted as a method for purchasing goods and services. It facilitates trade by eliminating the inefficiencies of barter systems. Historically, various items have served as mediums of exchange, including salt and gold. In modern economies, money, such as paper currency and coins, functions as the medium of exchange.

2. Give a brief note on unit of account.

Ans: A unit of account is a standard numerical monetary unit of measure used to value goods and services. It allows prices to be set and comparisons to be made. For example, when a computer is priced at Rs. 20,000, this value is used as a common reference for its worth, enabling buyers to understand and compare prices.

3. Write a short note on store of value.

Ans: A store of value is an asset that maintains its value over time without depreciating. Money serves this function effectively because it can be saved and used in the future, retaining its value. Unlike perishable goods, such as apples or oranges, money is durable and can be easily stored without losing its value, making it a reliable medium for saving and future use.