ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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an item of value
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as a medium of exchange
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as a store of value
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as an investment
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Detailed explanation-1: -money, a commodity accepted by general consent as a medium of economic exchange. It is the medium in which prices and values are expressed; as currency, it circulates anonymously from person to person and country to country, thus facilitating trade, and it is the principal measure of wealth.
Detailed explanation-2: -Money as a Store of Value In the monetary economy, money is considered a store of value, where it can be used as a means of saving and allocating capital. Money’s property as a store of value facilitates a transfer of purchasing power over time.
Detailed explanation-3: -Money may or may not have intrinsic value. Commodity money has intrinsic value because it has other uses besides being a medium of exchange. Fiat money serves only as a medium of exchange, because its use as such is authorized by the government; it has no intrinsic value.
Detailed explanation-4: -Currency-paper notes and coins – are now modern forms of money. The current kinds of money-currency and deposits – are inextricably related to the modern banking system’s operation. Currency: The Reserve Bank of India, on behalf of the Indian government, issues currency notes.