BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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money value=commodity value
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money value>commodity value
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money value<commodity value
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none of these
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Detailed explanation-1: -Credit money: It is that money whose value of money (face-value) is greater than the commodity value (intrinsic value) of money. Token coins and promissory notes are part of credit money. In other words, the money whose intrinsic value (as a commodity) is much lower than its face value is known as Credit money.
Detailed explanation-2: -Credit money has a face value which is much higher than the commodity value. Credit money consists of credit cards, demand deposits, among others.
Detailed explanation-3: -For full-bodied money, the money value and commodity value of the money are equal in the market.
Detailed explanation-4: -Commodity value of money refers to value of the commodity (like metal) that the money is made of. Thus, if coins are made of gold or silver (as was the practice in old days), commodity value of money refers to the market value of the gold or silver contained in the coin.
Detailed explanation-5: -In the field of economics, the commodity value of a good is its free market under optimal use conditions. In a free market, the commodity value of a good will be reflected by its price.