CAIE IGCSE Economics 3.1.1 Money Questions
Practise Cambridge IGCSE Economics by identifying the functions and characteristics of money in an economy.
- Syllabus
- 2027–2029
- Course
- Economics 0455
Exam points
- Define money and identify its functions in an economy.
- Explain how money acts as a medium of exchange and a store of value.
- Identify characteristics that allow coins and banknotes to perform money functions.
CAIE IGCSE Economics 3.1.1 Money Questions question 1
[Maximum number: 4]
Central banks influence their countries' money supply. Central banks also regulate commercial banks. Households benefit from these commercial banks in several ways. In recent years, commercial banks have introduced new technology. Global online banking increased by 14% between 2019 and 2022. These advances in technology were combined with a greater use of division of labour.
Explain two characteristics that coins possess which mean they can perform the functions of money.
Logical explanation which might include:
- generally acceptable ( 1 ) can be used to buy and sell products / acts as medium of exchange (1)
- limited in supply (1) minted by the government (1)
- durable (1) last some time / does not perish / hard to break / made of metal / acts as store of wealth / store of value (1)
- portable ( 1 ) coins can be carried in pockets / bags (1)
- homogeneous (1) all coins of the same value are the same (1)
- divisible ( 1 ) coins have different values / acts as medium of exchange (1).
4
One mark each for two characteristics identified and one mark each for two developments.
If more than two characteristics are given, consider the first three.
Only accept functions of money when used as a development of an identified characteristic of money.
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