Economics Online Class

USE APPROPRIATE WORDS

FROM THE GIVEN LIST BELOW

……………….is anything that is generally accepted in exchange (substitute / Replace) of goods and services. Before the evolution (development) of money, Goods or services are exchanged for other goods or services are known as ……………….. The difficulty for double coincidence (match) of wants, Problems of valuing goods, and Problems of storing wealth are the ………………. of barter system . In barter system the wants for one person can only be exchanged with the excess with him. It is difficult to match the ………………. and excess at the same time with persons dealing it. It is difficult to ………………. the value of goods in terms of other goods since there is no common standard of ……………….. Services & goods cannot be ………………. for a long time as such.

………………., in economics, the worth of a commodity or service measured against other commodities or services. The value of any object in the marketplace is determined by ………………. and ……………….. Anything that is both desirable and scarce, such as a diamond, will be valued more in the market. The value of money must be ………………. so as to enable to make future payments of same value. Value of money cannot be measured in terms of money; therefore it is measured in terms of the ………………. of other commodities that can be bought with money. So the value of money can only be assessed through the price of commodities. The tendency for prices to rise in general for all goods means the value of money is falling. The term ……………….refers to the value created in a product in the course of manufacturing or processing, exclusive of such costs as those of raw materials, packaging, or overhead. Legally valid currency (in specified denominations) that may be offered in payment of a debt and that a creditor must accept in redemption of a debt is referred to as ………………..

Money must perform certain functions. They are (a). Medium of exchange, (b). Measure of Value, (c). Store of value and (d). Standard of deferred payment. Medium of exchange is that it must be an ………………. in interactions between one another, Whereas Measure of value means that the commodity used as money must capable of ………………. the value of goods or service. Store of value function is the capability of money to store for a long time without ………………. its value. Standard of deferred payment function says that money must remain and act as a yardstick (criterion) in all the ………………. payments which are fixed in terms of money.

Money has ………………., because it is made legal-tender by law. (it means that, it must be accepted in settlement of debts). The people must accept money with confidence that its value will remain and can be used for exchanging goods and services. The ability to stay in good condition for a long time even if used many times is referred to as ……………….. ………………. is the quality to get divided without any loss of value. The quality of money that enable people to carry it from one place to other easily is referred to as ……………….. ………………. of money means that the quality of money must be alike for all units of same value. Money must be made ………………. in supply (to make it scarce), so as to preserve the value of it, in other words, it should not be available in plenty so as to be a free good. Moreover the value of money should be kept ………………. so as to make future payments at the same value. Finally the material made for money should be made in such a way that it should be very difficult to ………………..

In early days before the evolution of the present form of money, people were using a wide varieties of ………………. such as Tea leaves, Cowry shells etc. There after People started using ………………. and ………………. as money because of its scarcity and intrinsic (inherent) value. These were ……………….money because the face value of the coin (money) is equal to the value of the metal used to make the money. The relative shortage of gold and silver led to the introduction of other metal coins such as ……………….., ……………….and ………………. etc. This token money made of metals are heavy and it was difficult to carry but still then it was in use for long period in the ………………..