quiz no.

5
QUESTIONS

Direction: Answer the following questions comprehensively. You can make

research in the Internet to help you answer the questions concisely.

1. What circumstance led to the invention of money?

-On the value of the goods to be exchanged, people occasionally couldn't agree. In other
circumstances, people might just be unwilling to trade for what you had. Commodity
money was developed as a result of these circumstances. Commodities are essential items
that almost everyone uses.

2. Why is Money said to be a store of value?

-Money has a store of value because it is an asset that can be invested in, kept in a bank,
or left in a home safe before being used to make a future purchase. A store of value plays
an important role in the function of money by facilitating future trade.

3. How did Money evolve?

-The phrase "method of carrying out transactions in the economy" refers to the
payments system, which has changed over time. Money has evolved to reflect this change in
how people make payments.

4. What factors affect the demand for Money?

-Demands for money are influenced by real gross domestic product, interest rates, and
price level. These three factors work together to determine how much of a person's wealth
is held in interest-bearing assets and how much is held in cash and checking for daily
expenses.

5. What is referred to as the Transaction Demand?

-The quantity of money required for ongoing business and personal transactions is
referred to as the transaction demand for money. Carrying cash in your pocket to purchase
groceries, kitchenware, train tickets, and other items is an illustration of a transaction
demand for money.