Tag: liquidity preference and profit

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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.

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

In dynamic sense, money serves the following purposes:

  1. Gives direction to economic trends.

  2. Encourages specialisation and division of labour.

  3. Ensures transformation of savings into investments.

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

In a dynamic sense, money facilitates economic growth by allowing for specialization, enabling investment through savings, and signaling economic trends through price changes.

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

When we say that Money serves as a common measure of value, we are considering the _________ aspect of Money.

  1. Static

  2. Dynamic

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The static aspect of money refers to its role in facilitating current transactions and providing a stable unit of account at a specific point in time.

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

When we say that Money serves as a standard for deferred payments, we are considering the _________ aspect of Money.

  1. static

  2. dynamic

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The standard of deferred payments is considered a static function because it provides a fixed unit to settle debts and contracts, maintaining consistency in accounting.

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

Money is a standard of deferred payments. This means that:

  1. Future transactions can be settled In terms of money

  2. Loans given and repayments thereof can be established in terms of money

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

As a standard of deferred payments, money allows for the settlement of future obligations and the formalization of credit and loan agreements.