Tag: theories of distribution

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Questions Related to theories of distribution

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

Value of money is dependent on holding power of money .It is

  1. Transaction approach

  2. Cash balance approach

  3. Debit balance approach

  4. Asset approach
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The cash balance approach (often associated with the Cambridge equation) focuses on the demand for money based on the desire to hold money for transactions and as a store of value.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

The main functions performed by money are called ___________.

  1. contingent functions

  2. secondary functions

  3. primary or original function

  4. important functions
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The primary or original functions of money are those that define its basic purpose: serving as a medium of exchange and a measure of value.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

The liquidity approach emphasizes the function of money as a ________.

  1. standard of deferred payment of money

  2. store of money

  3. income from money

  4. (A) and (C)
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The liquidity approach to money emphasizes that money is held because it is the most liquid asset, serving as a store of value that can be used immediately.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

Measure of value of all goods and services refers __________ from following function of money.

  1. medium of exchange

  2. unit of account

  3. standard of deferred payments

  4. store of value
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The unit of account function allows money to serve as a common measure for the value of goods and services. This enables prices to be set and accounting to be performed.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

Money means anything that serves as ______________.

  1. medium of Exchange

  2. common measure of value

  3. store of Value

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Money is defined by its ability to act as a medium of exchange, a common measure of value, and a store of value. Since all these options are standard functions of money, 'all of the above' is correct.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

Narrow money refers to ________.

  1. $M _1$

  2. $M _2$

  3. $M _3$

  4. $M _4$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

As per the revised definition of M1 as a measure of money stock in India, it can be defined as currency plus demand deposits with commercial banks plus other deposits with RBI.
Since, this definition of money supply is narrow, it is termed as narrow money.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

 Money is ___________.

  1. neutral for production

  2. helpful for production

  3. harmful for production

  4. distorts production
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Money facilitates trade and investment, which are essential for production processes. By providing liquidity and a medium for exchange, it acts as a catalyst for economic activity.