11 mark
What is the most important characteristic of money?
It has intrinsic value.
It is generally acceptable.
It is portable.
It is readily available.
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Money & Banking (CIE IGCSE Economics)
Topic Questions
21 mark
What is not normally a function of the central bank of a country?
acting as lender of last resort
issuing notes and coins
operating the government’s monetary policy
setting the government’s budget
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31 mark
Which row shows a characteristic of money and a function of money?
| characteristic | function | |
|
A B C D |
acceptability cash divisibility store of value |
medium of exchange measure of value portability bank deposit |
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41 mark
Which advantage do coins have that make them more suitable than banknotes to act as money?
They are more divisible.
They are more durable.
They are more portable.
They are more recognisable.
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51 mark
What is a function of a central bank?
collecting taxes
issuing currency
providing bank accounts for individuals
setting foreign trade tariffs
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11 mark
An African government has abandoned its own dollar and now uses the US dollar as its currency.
Why would such a policy have been necessary?
Commercial banks restricted their lending.
Consumers only used credit cards rather than paper money.
Its own dollar no longer acted as a store of value.
The central bank controlled the issue of money too tightly.
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21 mark
A central bank acts as a lender of last resort especially in times of financial crisis.
What is the purpose of this function?
to cover credit card debts of consumers
to provide liquidity to the banking system
to remove failing banks from the financial system
to safeguard the profits of the banking system
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31 mark
What would be least likely to act as a store of value during a period of rapid inflation?
cash
gold
property
shares
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41 mark
Which role is typically performed by commercial banks rather than central banks?
Managing a country's foreign exchange rates
Changing interest rates to influence money supply
Controlling the nation's fiscal policy
Providing retail banking services to individuals and businesses
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51 mark
Which characteristic of money ensures that it can be easily exchanged for goods and services without any loss in value?
Portability
Acceptability
Recognisability
Divisibility
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11 mark
Which function do central banks and commercial banks have in common?
acting as a banker’s bank
controlling monetary policy
dealing with foreign exchange
supervising the banking system
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21 mark
What can a central bank increase in order to reduce consumer borrowing?
commercial bank deposits
government spending
the exchange rate
the rate of interest
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31 mark
Which organisations can directly fund the growth of firms?
| central bank |
commercial banks |
government | |
|
A B C D |
no no yes yes |
yes yes no no |
no yes no yes |
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41 mark
What is a function of a central bank?
collecting taxes
issuing currency
providing bank accounts for individuals
setting foreign trade tariffs
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51 mark
What is a function of a central bank?
accepting deposits from the public
determining tax rates
implementing monetary policy
lending to businesses
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