Q.Which one of the following is included in the primary function of money?
(A) Medium of exchange
(B) Measure of value
(C) Both (A) and (B)
(D) Store of value

Showing the 12 most recent of 18 on this concept.

1. CBSE 2025Set MARCH1 mark
   Q.Fill in the blank by choosing correct answer from the bracket (Financial, Government, RBI, Perfect competition, Product, Private): __________ is the only institution which can issue currency in India.

   ›Reveal solutionSolution

   The blank is filled by 'RBI'.

   In India the Reserve Bank of India (RBI) is the central bank and the sole authority for issuing currency notes (except the one-rupee note and coins, which are issued by the Government but circulated through the RBI). The currenc …

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2. CBSE 2025Set ANNUAL1 markMCQ
   Q.Which one of the following is included in the primary function of money? (A) Medium of exchange (B) Measure of value (C) Both (A) and (B) (D) Store of value

   ›Reveal solutionSolution

   Medium of exchange and measure of value are money's primary functions, so the answer is (C).

   The functions of money are classified as primary and secondary. The primary functions are (i) medium of exchange — money is accepted in all transactions, removing the need for double coincidence of wants, and (ii) measure (unit) of value — money provides a common yardstick to express prices. Store of value (D) and standard of deferred payment are secondary functions. Therefore bot …

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3. CBSE 2025Set ANNUAL1 markMCQ
   Q.The functions of money include (A) value determination (B) store of value (C) means of exchange (D) all of these

   ›Reveal solutionSolution

   All the listed roles are functions of money, so the answer is (D) all of these.

   Money carries out a set of functions. As a measure of value it determines and expresses the prices of goods (A). As a store of value it lets people hold purchasing power over time (B). As a medium/means of exchange it is accepted in buying and selling, overcoming the barter problem (C). Since value determination, store of value …

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4. CBSE 2025Set ANNUAL1 markMCQ
   Q.Which one of the following is false? At the time of Independence (1947), one Indian rupee was equal to:

   (a) 4 Four Annas

   (b) 2 Eight Annas

   (c) 64 Paise

   (d) 100 Paise

   ›Reveal solutionSolution

   At Independence (1947) one rupee equalled 16 annas (= 64 old paise), not 100 paise; the 100-paise system came only in 1957. So the false statement is (d) 100 Paise.

   At the time of Independence in 1947, India followed the pre-decimal currency system, in which one rupee was equal to 16 annas, and one anna to 4 pies/paise. Thus: 1 rupee = 16 annas = 4 × (four annas) = 2 × (eight annas) = 64 (old) paise. The decimal system, under which one rupee = 100 (new) paise, was introduced only in 1957. Therefore the state …

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5. CBSE 2024Set MARCH1 mark
   Q.Fill in the blank by choosing the correct answer from the brackets (Perfect competition, Export, Choice, Government, RBI, 1st April to 31st March): ———— is the only institution which can issue currency in India.

   ›Reveal solutionSolution

   The Reserve Bank of India (RBI) is the only institution that can issue currency in India.

   Currency in circulation must be legal tender, and to keep the money supply controlled the power to issue notes is given to a single authority — the central bank. In India this is the Reserve Bank of India (RBI). It has the sole right to issue currency notes (except one-rupee notes and coins, which are issued by the Government but circulated through the R …

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6. CBSE 2024Set ANNUAL1 markMCQ
   Q.Write True or False: Money is what money does.

   (a) True

   (b) False

   ›Reveal solutionSolution

   True — money is defined by its functions.

   The statement 'money is what money does' (Prof. Walker) means that anything which performs the functions of money — serving as a medium of exchange, a measure of value, a store of value and a standard of deferred payments — is money, regardless of its physical form. Money is thus defined functionally …

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7. CBSE 2024Set ANNUAL1 markMCQ
   Q.Write True or False: Commodity value of a ten rupee coin in India is more than its money value.

   (a) True

   (b) False

   ›Reveal solutionSolution

   False — the commodity value of a ₹10 coin is less than its money value.

   Coins in India are token money issued by the government. Their face (money) value is fixed by law and is far greater than the value of the metal contained in them (their commodity value). This is deliberate — if the metal were worth more than the face value, people would melt the coins. Therefore the c …

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8. CBSE 2024Set ANNUAL1 markMCQ
   Q.Money by order/authority of the Government is called _____ money.

   (a) fiat

   (b) fiduciary

   ›Reveal solutionSolution

   Fiat money is money created and backed by government order/law, not by trust or convertibility into a commodity.

   Fiat money is money that derives its status as money purely from government order/law (fiat = 'let it be done') — currency notes and coins issued by the central bank/government are fiat money, and by law every citizen must accept them as payment (legal tender). This is distinct from fiduciary money, which is money accepted because people have faith/trust in the issuer (e.g., cheques …

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9. CBSE 2023Set ANNUAL1 markMCQ
   Q.Which of the followings agency is response for using Rs. 1 currency note in India.

   (a) Reserve Bank of India

   (b) Ministry of Commerce

   (c) Ministry of Finance

   (d) Niti Ayog

   ›Reveal solutionSolution

   The ₹1 currency note is issued by the Ministry of Finance — option (c).

   In India, all currency notes except the one-rupee note are issued by the Reserve Bank of India. The one-rupee note (and all coins) is issued by the Government of India through the Ministry of Finance, and it bears the signature of the Finance Secretary …

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10. CBSE 2023Set ANNUAL1 mark
    Q.Define money.

    ›Reveal solutionSolution

    Money is any generally accepted medium of exchange — it solves the problem of barter by letting buying and selling happen without a double coincidence of wants.

    Before money, trade happened through barter — directly swapping one good for another — which required a "double coincidence of wants" (each party had to want exactly what the other was offering). Money removes this problem because it is accepted by everyone as payment, so a seller can take money for goods and later use that same money to buy whatever they actually want, from someone else entirely. Money performs several functions: it is a medium of exchange (used to buy and sell), a unit of account (prices of all goods are expressed in it, making values comparable), a store of value (it can be held and used to buy things later, unlike a perishable good), and a standard of deferred payment (loans and future contracts are state …

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11. CBSE 2022Set ANNUAL1 markMCQ
    Q.(iv) The institution issuing currency in India is (A) Bank of India (B) State Bank of India (C) Union Bank of India (D) Reserve Bank of India

    ›Reveal solutionSolution

    Currency in India is issued by the Reserve Bank of India — option (D).

    The Reserve Bank of India (RBI), the country's central bank, holds the monopoly of note issue and is the sole issuing authority of currency notes in India. The notes it issues are legal tender, accepted in settlement of all debts. (The State Bank of India, …

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12. CBSE 2022Set ANNUAL1 markMCQ
    Q.In following, who issues currency in India-

    (a) Reserve Bank of India

    (b) World Bank

    (c) Head Post Office

    (d) None of these

    (a) Reserve Bank of India

    (b) World Bank

    (c) Head Post Office

    (d) None of these

    ›Reveal solutionSolution

    The Reserve Bank of India is the sole currency-issuing authority in India.

    As India's central bank, the RBI holds the exclusive legal right to print and issue currency notes (except the one-rupee note/coin, issued by the Government of India). The World Bank is an international development lending institution and has no role in issuing any country's domestic currency. The Head Pos …

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