Tag: theories of distribution

Quizzes (5) Questions (164)

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

Which of the following are the seven parts of the financial system?

  1. Financial instruments, credit cards, financial instruments, regulatory agencies, central banks, Federal reserve System, money

  2. Financial instruments, money, financial instruments, the Security and Exchange Commission, central banks, Federal Reserve System, credit cards

  3. Money, financial instruments, financial markets, financial institutions, regulatory agencies, central banks, Federal Reserve System

  4. Money, financial instruments, financial markets, banks, regulatory agencies, central banks, Federal Reserve System, credit cards
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The financial system is typically categorized into these seven components: money, financial instruments, financial markets, financial institutions, regulatory agencies, central banks, and the Federal Reserve System.

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

The relatively less important functions of money are called __________.

  1. secondary function

  2. derived functions

  3. both (A) and (B)

  4. derivative function
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Functions of money are often categorized as primary and secondary (or derived). The less important functions are generally referred to as secondary or derived functions.

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

As per Irving Fisher principle, if the quantity of money is reduced by one half  ________.

  1. the price level will also be reduced by one half

  2. value of money will be twice

  3. the price level will be double and the value of money will be one half

  4. the price level will also be reduced by one half and value of money will be double.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

According to the Fisher equation of exchange (MV=PT), if velocity (V) and transactions (T) are constant, the price level (P) is directly proportional to the money supply (M). If M is halved, P is halved, and since the value of money is the reciprocal of the price level (1/P), it doubles.

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

The transaction approach to the "Quantity Theory of Money" is given by ____________.

  1. Frisch

  2. Fisher

  3. Finlay

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

This appears to be a duplicate of question 473932. Irving Fisher developed the transaction approach to the Quantity Theory of Money, expressed as MV = PT. This focuses on money's role in facilitating transactions. Frisch is associated with econometrics, not monetary theory. Fisher's formulation is the standard transaction-based version taught in economics.

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

Functions of money doesn't include:

  1. Medium of exchange

  2. Store of value

  3. Measure of value

  4. Employment generation
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The primary functions of money are medium of exchange, store of value, and measure of value. Employment generation is an economic goal or outcome, not a functional definition of money itself.

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

Which of the following statements about Money is incorrect?

  1. There are many assets which carry the attribute of money.

  2. Money is what money does.

  3. Value of money remains constant at all periods of time

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The value of money is inversely related to the price level. Because price levels fluctuate due to inflation or deflation, the value of money does not remain constant over time.