ECONOMICS (CBSE/UGC NET)

ECONOMICS

MONETARY POLICY

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

One characteristic of money is that it is a store of value. Which of the following items is the greatest at storing value?

A	Apple
B	Computer
C	Car
D	Gold

Explanation:

Detailed explanation-1: -Gold is regarded as the ultimate safe-haven asset since its store of value does not deteriorate in an economic crisis, is always in demand and is easily convertible.

Detailed explanation-2: -The characteristics of money are durability, portability, divisibility, uniformity, limited supply, and acceptability. Let’s compare two examples of possible forms of money: A cow.

Detailed explanation-3: -A store of value is an asset that maintains its value, rather than depreciating. Gold and other precious metals are good stores of value because their shelf lives are essentially perpetual. A nation’s currency must be a reasonable store of value for its economy to function smoothly.

Detailed explanation-4: -Money serves as a store of value.

Detailed explanation-5: -A store of value is an asset that does not depreciate. Gold and silver are great examples since their shelf life is basically perpetual. Food and vehicles are not stores of value since they depreciate rapidly and lose value.

There is 1 question to complete.