Senior Secondary (HKDSE) · Economics

Money: Practice Questions

5 multiple-choice questions marked as you go, and 5 written questions with worked solutions. All on Money.

10 questions23 marksFree, no account

Question 1

1 mark

Which characteristic of money is essential for it to effectively serve as a medium of exchange, eliminating the reliance on a double coincidence of wants?

Question 2

1 mark

According to the theory of money demand, the opportunity cost of holding money primarily refers to:

Question 3

1 mark

Suppose an economy experiences a period of unexpectedly high inflation. How does this unanticipated inflation primarily affect the wealth of individuals holding significant amounts of currency (cash) and non-interest-bearing demand deposits?

Question 4

1 mark

In Hong Kong, which of the following items is included in the definition of M1?

Question 5

1 mark

In the definition of money supply aggregates in Hong Kong, what is the main distinction between M2 and M3?

Question 6

2 marks

Define the unit of account function of money and explain why it is essential for calculating the total value of different goods in an economy.

Write your answer out first, then check it against the worked solution.

Question 7

3 marks

Identify two key differences between the definitions of M1 and M3 money supply in Hong Kong.

Write your answer out first, then check it against the worked solution.

Question 8

5 marks

Excluding its function as a medium of exchange, explain two other essential functions that money performs in a modern economy.

Write your answer out first, then check it against the worked solution.

Question 9

4 marks

Money serves several crucial functions in a modern economy. Explain four main functions of money.

Write your answer out first, then check it against the worked solution.

Question 10

4 marks

The demand for money can be broadly categorized into transactions demand and asset demand.

(a) Explain why the transactions demand for money depends positively on income.

(b) Explain why the asset demand for money depends negatively on the nominal interest rate.

Write your answer out first, then check it against the worked solution.

* The content provided by thinka is generated by AI and may not always be accurate or up-to-date. Please use it as a supplementary resource and verify with official materials.

You've seen the model answer. Now get yours marked.

This page can show you how a good answer looks. It cannot tell you what your answer was missing. thinka marks your written work against the real mark scheme in about 15 seconds.

Get My Answers Marked Back to the notes

Want more questions like these? Get a fresh set on this topic, graded as you go.