2021 · Q58
For anything to be recognized as money, it needs to have which of the following characteristics?
- 1Act as an intermediate in exchange process the
- 2Standard unit for quoting prices
- 3Must be easily divisible
- 4Have higher value in alternative uses
Select the correct answer using the code given below.
indian-polity-economybanking-finance
- A1, 2 and 4
- B2 and 3 only
- C1, 2 and 3
- D1, 3 and 4
Explanation
For anything to function as money it must serve as a medium of exchange (statement 1), a standard unit for quoting prices (statement 2), and be easily divisible (statement 3). Statement 4 is excluded: money must not have a higher value in alternative uses, otherwise people would melt or hoard it rather than spend it. Hence statements 1, 2 and 3 are the required characteristics.