In Class 9 Introduction to Financial Markets, the topic “Key Characteristics of Money” is explained to help students understand why money is universally accepted as a medium of exchange. The NCERT Solutions for this section provide clear and accurate answers to textbook questions.
Key Characteristics of Money Class 9 NCERT Solutions
I. Choose the correct answer.
Q. The most important criterion for anything to serve as money is __.
a) It should be readily available.
b) It must be readily acceptable.
c) It should be a coin.
Q. One of our goals in saving is to ensure that the value of our savings doesn’t __.
a) decrease over time
b) increase over time
c) have no value over time
Q. Money must not be easily reproduced by people and should be __.
a) readily available
b) easily produced in abundance
c) relatively scarce
Q. Which of the following is one of the characteristics of money?
a) Easily reproducible by people.
b) Unlimited value
c) Divisible into usable quantities.
II. Fill in the blanks:
Q. An effective medium of exchange must be ______.
Show Answer ⟶Q. Rather than using money for spending today, it can be __ for use in the future.
Q. Money must be __ into usable quantities or fractions.
Show Answer ⟶Q. Money helps to simplify the __ process.
Show Answer ⟶III. Match the following:
- Unit of account – standard of value
- Medium of exchange – Readily acceptable
- Durable – Long-lasting
- Relatively scarce – difficult to produce in abundance
- Divisible – Usable quantities
IV. True or false.
Q. Money is not a common item in which the prices of all goods and services cannot be set.
Show Answer ⟶Q. Commodity money cannot be saved for the future.
Show Answer ⟶Q. Money serves as a standard of value.
Show Answer ⟶Q. Money as a medium of exchange today has taken the form of paper currency and coins.
Show Answer ⟶V. Answer the following briefly.
Q. What is meant by medium of exchange?
Answer: Money is called a medium of exchange because it helps people buy and sell goods and services easily. Money helps bring simplicity and organisation to our economy. The most important thing about money is that everyone should be willing to use and accept it.
Q. Give a brief note on the unit of account.
Answer: Money acts as a standard of value or unit of account, meaning money provides a common measure to set prices for goods and services. For example, suppose you want to buy a computer; the previous time it was difficult to understand how many bags of rice I had to give in exchange for the product.
Q. Write a short note on store of value.
Answer: Money has a third function, as a store of value. Rather than spending the money today, you can store it for future use. For example, suppose you want to buy an apple, but you don’t want to spend all your income immediately; you want to save it for further use.
Q. Why should money be divisible into usable quantities?
Answer: Money needs to be divisible so that it can be used for transactions of all types of products, like buying a pencil or purchasing a car. If money is divided into smaller units, then low-cost items like a pen or a snack can be purchased.
VI. Answer in detail.
Q. Explain the characteristics of money.
Answer: Money is more than just coins; it helps to make trade and saving possible. There are general characteristics for acceptability as money.
- To work as a medium of exchange, money must be durable.
- Money must not be easily reproduced by people in abundance and should be relatively scarce.
- Money must be relatively scarce; it can’t be too scarce.
- Money has to be easy to transport.
- Money must be divisible into usable quantities of fractions.
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