Revision-2023

Money and Banking (chapter-5)

1. Two of the function of money are to act as …………………………… of exchange and a

………………………. For ………………………….payments.
2. A……………………………. bank act as the bank to government and
issues………………….and ………………………
1. What is a function of commercial banks?
A. accept deposits and savings
B. lender of last resort to government
C. manage the national debt
D. operate monetary policy
2. One of the functions of money is to act as a measure of value. What does this mean?
A. Money allows people to borrow and lend.
B. Money allows people to save their surplus income.
C. Money is used to buy goods and services.
D. Money is used to compare the worth of different goods and services.

1. Cigarettes have been used as money in exceptional circumstances. What is the most likely
reason that they are not acceptable as money in normal circumstances?
A. cigarettes lack durability
B. cigarettes lack intrinsic value
C. cigarettes lack portability
D. cigarettes lack uniformity
2. Give one word for the exchange of goods for goods
A. Barter system
B. Money system
C. Exchanging system
D. Banking system

3. Which system of exchange was used before money was invented?

A. Barter system
B. Bank notes and coins system
C. Economic system
D. Monetary system

4. Which are the three types of banks?

A. Central bank, Commercial banks and development banks
B. Central bank, development bank and Ned bank
C. Commercial banks, Ned bank and Standard Bank
D. FNB, Ned bank and Standard bank

1 Grade 8 Economics ANIL

 5. What is barter system?
A. Exchange of goods and services for banknotes
B. Exchange of goods for money
C. Exchange of goods for services
D. Exchange of services for money

True or false

1. Bartering is a most convenient way to carry out business.

2. Double coincidence of wants is one of the problems of barter system
3. Acceptability and Durability are characteristics of good money
4. House is an example of near money
5. M5 is an example of fiat money
6. Money as a medium of Exchange promotes economic efficiency by minimizing time
spent in exchanging goods
7. Money as a store of Value used to save purchasing power; most liquid of all assets but
loses value during inflation
8. Money used as a unit of account doesn’t measure value of goods and services
the economy
9. Income and wealth are not money in the view of economist.
10. Fiat money does not possesses exchange value
11. Something like cigarette that contains intrinsic value and is used in exchange
12. The earliest form of money was goods
13. Dollar is our (Lesotho) Legal tender.
14. Bank notes and coins are merely a token
15. Mpesa,and Ecocash are not a money associated instruments.

Answer the following

1. What is money?
2. Mention four functions of commercial bank
3. What is the main function of central bank?
4. Explain four functions of money

2 Grade 8 Economics ANIL