ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It was used as part of a barter system
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It was used as a currency
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It was used as respresentative money
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It was used as fiat money
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Detailed explanation-1: -Until the nineteenth century, the Akan used grains of gold-dust, as well as objects such as cowrie shells, as their medium of exchange. The Akan didn’t use price tags, the way we do today, to indicate how much an item cost.
Detailed explanation-2: -A medium of exchange is anything that is used to determine value during the exchange of goods and services.
Detailed explanation-3: -Commodity money consists of objects having value or use in themselves (intrinsic value) as well as their value in buying goods.
Detailed explanation-4: -Fractional reserve banking is a system in which only a fraction of bank deposits are required to be available for withdrawal. Banks only need to keep a specific amount of cash on hand and can create loans from the money you deposit. Fractional reserves work to expand the economy by freeing capital for lending.