Theory question 108
Money and InflationSection B: answer three questions only from this section.
What is money? Explain its characteristics.
Show the model answer
Model answer
Money is anything generally acceptable as a medium of exchange and in settlement of debts
Characteristics: general acceptability
Portability (easy to carry)
Durability (does not wear out quickly)
Divisibility into smaller units without loss of value
Homogeneity / uniformity (units of the same value are identical)
Scarcity / limited supply, so it keeps its value
Stability of value
Recognisability and difficulty to forge
Each characteristic should be explained briefly
Explanation
Define money, then explain at least five characteristics.