ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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There’s only 5 types of money
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Money must be available but only in limited supply
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Money is the most important thing in the world
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None of the above
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Detailed explanation-1: -The characteristics of money are durability, portability, divisibility, uniformity, limited supply, and acceptability.
Detailed explanation-2: -To summarize, the money supply is important because if the money supply grows at a faster rate than the economy’s ability to produce goods and services, then inflation will result. Also, a money supply that does not grow fast enough can lead to decreases in production, leading to increases in unemployment.
Detailed explanation-3: -They are hard to obtain. There is a finite supply of them in the world. They stand up to time well. They are easily divisible into standardized coins and do not lose value when made into smaller units.
Detailed explanation-4: -In order for money to function well as a medium of ex-change, store of value, or unit of account, it must possess six characteristics: divisible, portable, acceptable, scarce, durable, and stable in value.