Money & Banking is one of 10 topics in the Grade 11 Economics CAPS syllabus, covered across 3 lessons on Study Vault. Below are real practice questions from this topic with full worked answers.
Sample practice questions
Easy
1. Money allowing goods and services to be traded without requiring a "double coincidence of wants" describes which function of money?
Medium of exchange
Unit of account
Store of value
Standard of deferred payment
Answer: Medium of exchange — As a medium of exchange, money removes the need for a double coincidence of wants (both parties in a trade wanting exactly what the other has), since goods can be sold for money and that money used to buy anything else.
Easy
2. Money providing a common measure in which the value of different goods and services can be expressed and compared describes which function of money?
Unit of account
Medium of exchange
Store of value
Standard of deferred payment
Answer: Unit of account — As a unit of account, money provides a common measure allowing the value of different goods and services (such as bread and milk) to be expressed in the same terms and compared.
Medium
3. What term describes notes and coins that have value because government declares them legal tender and the public accepts them, rather than being backed by a physical commodity like gold?
Answer: Fiat money — Fiat money is currency, such as South African notes and coins issued by the SARB, that has value because government declares it legal tender and the public accepts it, rather than being backed by a physical commodity.
