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Topical›Economics 0455›Microeconomic decision makers›Money and banking›Paper 1

Money and banking — Paper 1 · IGCSE Economics 0455

3.1· 119 questions · 119 marks · 143 min · 2004–2025· Multiple choice

Every Cambridge IGCSE Economics Paper 1 question on money and banking, laid out as 22 A4 pages with the mark scheme below. Nothing is left out. Free to read, no account.

QuestionsMark scheme
Different topic or paper

Questions22 pages

Question 1: Why do bank notes function as money? A They are durable. B They are generally acceptable. C They count as legal tender. D They have intrins…Question 2: To whom does the central bank usually make loans? A individuals B limited companies C the government D trade unionsQuestion 3: What is likely to be the effect of a fall in interest rates on a consumer's borrowing and saving? borrowing saving A falls falls B falls ri…Question 4: A person receives annual interest of 4 % on their saving. Inflation is 5 % per annum. What is the change in the real value of their saving?…Question 5: What makes specialisation easier? A the imposition of taxation B the protection of trade C the system of barter D the use of moneyQuestion 6: Which asset is the most illiquid? A cash B money order C government bonds D a house1 / 22
Question 7: In wartime conditions, cigarettes have been used as money. What disadvantage do cigarettes have for trading compared with notes and coins? …Question 8: In most countries which organisation controls the banking system? A central bank B commercial bank C investment bank D World BankQuestion 9: Which of the following benefits does a stock exchange provide? A a source of finance for private limited companies B a safeguard against th…Question 10: In many developing countries people grow agricultural products. They sell what they produce to buy other goods. What is required for this s…Question 11: What function does a central bank provide for the general public? A accepting deposits B issuing banknotes C making loans D providing overd…Question 12: What is a function of a commercial bank? A acting as the lender of last resort B deciding what is a legal tender C determining monetary pol…2 / 22
Question 13: One of the functions of money is to act as a measure of value. What does this mean? A Money allows people to borrow and lend. B Money allow…Question 14: What is a function of a commercial bank? A acting as the lender of last resort B deciding what is a legal tender C determining monetary pol…Question 15: One of the functions of money is to act as a measure of value. What does this mean? A Money allows people to borrow and lend. B Money allow…Question 16: A stock exchange is a market in which A a system of barter operates. B the interest rate is fixed. C the value of the exchange rate is dete…Question 17: ‘Savers suffer as inflation rises to 4.4 %.’ Which function of money is most involved in this statement? A means of deferred payments B med…Question 18: A stock exchange is a market in which A a system of barter operates. B the interest rate is fixed. C the value of the exchange rate is dete…3 / 22
Question 19: ‘Savers suffer as inflation rises to 4.4 %.’ Which function of money is most involved in this statement? A means of deferred payments B med…Question 20: A stock exchange is a market in which A a system of barter operates. B the interest rate is fixed. C the value of the exchange rate is dete…Question 21: ‘Savers suffer as inflation rises to 4.4 %.’ Which function of money is most involved in this statement? A means of deferred payments B med…Question 22: What may cause an individual to save a higher proportion of their income? A a belief that the price of goods will rise in the future B a fa…Question 23: A person wishes to buy shares in order to make a long-term profit, but wants as little risk of short-term loss as possible. Which type of s…Question 24: Which statement about a country’s banks is correct? A Commercial banks hold the financial accounts of the government. B Commercial banks se…4 / 22
Question 25: Which statement about a country’s banks is correct? A Commercial banks hold the financial accounts of the government. B Commercial banks se…Question 26: Which statement about a country’s banks is correct? A Commercial banks hold the financial accounts of the government. B Commercial banks se…Question 27: Which motive is most likely to increase the wish to open a savings account? A to have cash immediately available B to prepare for future ex…Question 28: Share prices on the stock market are most likely to rise if A employment falls. B interest rates fall. C interest rates rise. D tax rates r…Question 29: The ways of making and receiving payments continue to develop. As well as cash, debit cards and credit cards, mobile (cell) phones are now …Question 30: Which motive is most likely to increase the wish to open a savings account? A to have cash immediately available B to prepare for future ex…5 / 22
Question 31: The ways of making and receiving payments continue to develop. As well as cash, debit cards and credit cards, mobile (cell) phones are now …Question 32: Which motive is most likely to increase the wish to open a savings account? A to have cash immediately available B to prepare for future ex…Question 33: Share prices on the stock market are most likely to rise if A employment falls. B interest rates fall. C interest rates rise. D tax rates r…Question 34: The ways of making and receiving payments continue to develop. As well as cash, debit cards and credit cards, mobile (cell) phones are now …Question 35: For anything to be used as money, it must be A a fixed value. B in fixed supply. C legal tender. D readily acceptable.Question 36: For anything to be used as money, it must be A a fixed value. B in fixed supply. C legal tender. D readily acceptable.6 / 22
Question 37: For anything to be used as money, it must be A a fixed value. B in fixed supply. C legal tender. D readily acceptable.Question 38: Why do banknotes function as money? A They are backed by gold. B They are durable. C They are generally acceptable. D They have intrinsic v…Question 39: What might encourage a consumer to save rather than to spend? A being made unemployed B discounts on products C government subsidies to pro…Question 40: Why do banknotes function as money? A They are backed by gold. B They are durable. C They are generally acceptable. D They have intrinsic v…Question 41: An individual has various financial assets. What is the most easily available as cash? A a current (checking) bank account B government bon…Question 42: Why do banknotes function as money? A They are backed by gold. B They are durable. C They are generally acceptable. D They have intrinsic v…7 / 22
Question 43: The use of a mobile (cell) phone to make payments is an example of which function of money? A a medium of exchange B a standard of deferred…Question 44: A function of money is to act as a measure of value. What does this mean? A It is used to compare the worth of different goods. B It is use…Question 45: The use of a mobile (cell) phone to make payments is an example of which function of money? A a medium of exchange B a standard of deferred…Question 46: Which function of money enables people to compare the worth of different products? A medium of exchange B standard for deferred payments C …Question 47: Which function of money enables people to compare the worth of different products? A medium of exchange B standard for deferred payments C …Question 48: What will be the most likely effect of a fall in interest rates on saving and borrowing? saving borrowing A decrease decrease B decrease in…8 / 22
Question 49: A merchant travels abroad for a few days to buy samples of low-value goods from a range of manufacturers. Which property of money would be …Question 50: What may cause an individual to save a higher proportion of their income? A a belief that the price of goods will rise in the future B a fa…Question 51: In 2013 there was a period of low interest rates and high inflation in an economy. Who would be most likely to benefit and who most likely …Question 52: What may cause an individual to save a higher proportion of their income? A a belief that the price of goods will rise in the future B a fa…Question 53: In 2008, economic conditions in the UK were uncertain and the rate of inflation increased. It was reported that consumers had increased the…9 / 22
Question 54: Cigarettes have been used as money in exceptional circumstances. What is the most likely reason that they are not acceptable as money in no…Question 55: A businesswoman seeks a 10-year loan from a bank. She has listed her four most valuable possessions which could be offered to the bank in o…Question 56: A country’s central bank raised the rate of interest from 1% to 4% per year. How would this change have affected the amount saved and the c…Question 57: What is the usual reason why citizens trust their country’s banknotes? A They are acceptable for trade and exchange. B They are backed by g…Question 58: When will a central bank act as lender of last resort to a commercial bank? A when a commercial bank faces a liquidity crisis B when a comm…10 / 22
Question 59: What function does a central bank fulfil? A It issues currency. B It offers overdraft facilities to individuals. C It operates deposit acco…Question 60: Individuals produced their own goods. They then decided to specialise. They formed a group and offered their skills to each other but witho…Question 61: Which statement about financial matters is correct? A Commercial banks’ main activity is the finance of international trade. B Paper bankno…Question 62: What is a function of a central bank? A accepting deposits from the public B determining tax rates C implementing monetary policy D lending…Question 63: What does a commercial bank not provide? A cash B bonds C loans D mortgagesQuestion 64: What is not a function of a central bank? A It is the lender of last resort to financial institutions. B It is the sole issuer of notes and…11 / 22
Question 65: What is a function of a central bank? A collecting taxes B issuing currency C providing bank accounts for individuals D setting foreign tra…Question 66: A central bank acts as a lender of last resort especially in times of financial crisis. What is the purpose of this function? A to cover cr…Question 67: What is a function of a country’s stock exchange? A to act as lender of last resort to commercial banks B to provide a market for the purch…Question 68: What is most likely to encourage the immediate purchase of an expensive item such as a new car? A anticipating a fall in the rate of inflat…Question 69: What would be least likely to act as a store of value during a period of rapid inflation? A cash B gold C property D sharesQuestion 70: Which advantage do coins have that make them more suitable than banknotes to act as money? A They are more divisible. B They are more durab…12 / 22
Question 71: An African government has abandoned its own dollar and now uses the US dollar as its currency. Why would such a policy have been necessary?…Question 72: What is not normally a function of the central bank of a country? A acting as lender of last resort B issuing notes and coins C operating t…Question 73: Which organisations can directly fund the growth of firms? central commercial government bank banks A no yes no B no yes yes C yes no no D …Question 74: What is the most important characteristic of money? A It has intrinsic value. B It is generally acceptable. C It is portable. D It is readi…Question 75: Banks decrease interest rates. What is likely to be the effect of this on borrowing and saving? borrowing saving A falls falls B falls rise…13 / 22
Question 76: What is an advantage to a country of having an efficient commercial banking system? A It controls the money supply. B It discourages spendi…Question 77: What can a central bank increase in order to reduce consumer borrowing? A commercial bank deposits B government spending C the exchange …Question 78: Which row shows a characteristic of money and a function of money? characteristic function A acceptability medium of exchange B cash measur…Question 79: What can a central bank increase in order to reduce consumer borrowing? A commercial bank deposits B government spending C the exchange …Question 80: Which function does a central bank provide for the general public? A accepting deposits B issuing banknotes C making loans D providing over…Question 81: It is expected that consumers will use less paper money. What is the most likely reason for this? A Inflation reduces the value of paper mo…14 / 22
Question 82: What is the money supply? A the total quantity of foreign currency available within the economy B the total quantity of money available wit…Question 83: Which activity is correctly linked to the organisation that provides it? organisation activity A central bank regulate the rate of inflatio…Question 84: Which activity is correctly linked to the organisation that provides it? organisation activity A central bank regulate the rate of inflatio…Question 85: Which activity is correctly linked to the organisation that provides it? organisation activity A central bank regulate the rate of inflatio…Question 86: In a country, inflation is 10% and nominal interest rates are 7%. Which group is most likely to benefit from this situation? A borrowers B …15 / 22
Question 87: Which organisations can directly fund the growth of firms? central commercial governments banks banks A no yes no B no yes yes C yes no no …Question 88: Which advantage do coins have that makes them more suitable than paper banknotes to act as money? A They are more divisible. B They are mor…Question 89: Which organisations can directly fund the growth of firms? central commercial governments banks banks A no yes no B no yes yes C yes no no …Question 90: Which advantage do coins have that makes them more suitable than paper banknotes to act as money? A They are more divisible. B They are mor…Question 91: The central bank of a country decreases interest rates to help the economy out of a recession. How is this decrease in interest rates most …16 / 22
Question 92: Which organisations can directly fund the growth of firms? central commercial governments banks banks A no yes no B no yes yes C yes no no …Question 93: Which advantage do coins have that makes them more suitable than paper banknotes to act as money? A They are more divisible. B They are mor…Question 94: What is a function of commercial banks? A accept deposits and savings B lender of last resort to government C manage the national debt D op…Question 95: What would be least likely to act as a store of value during a period of rapid inflation? A cash B gold C property D sharesQuestion 96: A country’s central bank raised the rate of interest from 1% to 4% per year. How would this change have affected the amount saved and the c…17 / 22
Question 97: Savers suffer as inflation rises to 4.4%. Which function of money is most involved in this statement? A means of deferred payments B medium…Question 98: One of the functions of money is to act as a measure of value. What does this mean? A Money allows people to borrow and lend. B Money allow…Question 99: Which row shows a characteristic of money and a function of money? characteristic function A acceptability medium of exchange B cash measur…Question 100: When will a central bank act as lender of last resort to a commercial bank? A when a commercial bank faces a liquidity crisis B when a comm…Question 101: A person planning for old age saves in the form of money rather than goods. Which function does money perform when this is done? A medium o…18 / 22
Question 102: What is not normally a function of the central bank of a country? A acting as lender of last resort B issuing notes and coins C operating t…Question 103: The ways of making and receiving payments continue to develop. Payments can now be made using smartphones, as well as cash, debit cards and…Question 104: In most countries, which organisation controls the banking system? A central bank B commercial bank C investment bank D World BankQuestion 105: What must have happened in a country when it experienced an annual rate of inflation of 100%? A The money supply doubled. B The price level…Question 106: A function of money is to act as a measure of value. What does this mean? A It is used for future savings. B It is used to compare the wort…19 / 22
Question 107: The table shows information about four financial institutions. Which institution is most likely to be a commercial bank? it is the it is ow…Question 108: Which function of money acts as a measure of value? A a medium of exchange B a standard of deferred payment C a store of wealth D a unit of…Question 109: What function does a central bank provide for an economy? A It issues bank notes to encourage spending. B It manages the debt of private se…Question 110: What is not a function of money? A medium of exchange B portability C store of value D unit of accountQuestion 111: What is an important role of a central bank? A attempts to achieve price stability B issues credit cards C provides loans to producers D pr…Question 112: What is the money supply? A the total quantity of foreign currency available within the economy B the total quantity of money available wit…20 / 22
Question 113: What is a function of a commercial bank? A accepting deposits B controlling money supply C issuing notes and coins D lending money to the g…Question 114: Which function does a central bank provide for the general public? A accepting deposits B issuing banknotes C making loans D providing over…Question 115: What is not a form of money? A a banknote B a cheque C a coin D a credit cardQuestion 116: If interest rates fall, what will be the most likely effect on saving and borrowing? saving borrowing A decrease decrease B decrease increa…Question 117: What is the function of money when it is used to value goods and record transactions? A a medium of exchange B a standard of deferred payme…Question 118: What is not a role of the central bank? A to act as the lender of last resort B to hold deposits from the general public C to issue notes a…21 / 22
Question 119: Why do banknotes function as money? A They are backed by gold. B They are durable. C They are generally acceptable. D They have intrinsic v…22 / 22

Mark scheme119 answers

Answers below. Sit the paper first if you are practising.

Pastlit

Economics 0455 · Money and banking — Paper 1

IGCSE · topical answer key — answer key (teacher use)

Question

Answer

Marks

1B1
2C1
3C1
4A1
5D1
6D1
7C1
8A1
9C1
10C1
11B1
12D1
13D1
14D1
15D1
16D1
17C1
18D1
19C1
20D1
21C1
22C1
23D1
24B1
25B1
26B1
27B1
28B1
29A1
30B1
31A1
32B1
33B1
34A1
35D1
36D1
37D1
38C1
39D1
40C1
41A1
42C1
43A1
44A1
45A1
46D1
47D1
48B1
49C1
1 / 3

Pastlit

Economics 0455 · Money and banking — Paper 1

IGCSE · topical answer key — answer key (teacher use)

Question

Answer

Marks

50C1
51A1
52C1
53D1
54A1
55C1
56D1
57A1
58A1
59A1
60D1
61C1
62C1
63B1
64C1
65B1
66B1
67B1
68C1
69A1
70B1
71C1
72D1
73B1
74—1
75—1
76D1
77D1
78A1
79D1
80B1
81B1
82B1
83A1
84A1
85A1
86A1
87B1
88B1
89B1
90B1
91B1
92B1
93B1
94A1
95A1
96D1
97C1
98D1
2 / 3

Pastlit

Economics 0455 · Money and banking — Paper 1

IGCSE · topical answer key — answer key (teacher use)

Question

Answer

Marks

99A1
100A1
101C1
102D1
103A1
104A1
105C1
106B1
107B1
108D1
109A1
110B1
111A1
112B1
113A1
114B1
115—1
116B1
117D1
118B1
119C1
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Questions as text

Q1 · Why do bank notes function as money? 0455/11 Oct/Nov 2004

4 Why do bank notes function as money? A They are durable. B They are generally acceptable. C They count as legal tender. D They have intrinsic value.

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2004

Q2 · To whom does the central bank usually make loans? 0455/11 Oct/Nov 2004

8 To whom does the central bank usually make loans? A individuals B limited companies C the government D trade unions

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2004

Q3 · What is likely to be the effect of a fall in interest rates on a consumer's borrowing and… 0455/11 Oct/Nov 2004

18 What is likely to be the effect of a fall in interest rates on a consumer's borrowing and saving? borrowing saving A falls falls B falls rises C rises falls D rises rises

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2004

Q4 · A person receives annual interest of 4 % on their saving 0455/11 Oct/Nov 2006

31 A person receives annual interest of 4 % on their saving. Inflation is 5 % per annum. What is the change in the real value of their saving? A It falls 1 %. B It rises 4 %. C It falls 5 %. D It rises 9 %.

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2006

Q5 · What makes specialisation easier? 0455/11 May/June 2007

2 What makes specialisation easier? A the imposition of taxation B the protection of trade C the system of barter D the use of money

1 marks

Answer: D

This question in 0455/11 May/June 2007

Q6 · Which asset is the most illiquid? 0455/11 May/June 2007

17 Which asset is the most illiquid? A cash B money order C government bonds D a house

1 marks

Answer: D

This question in 0455/11 May/June 2007

Q7 · In wartime conditions, cigarettes have been used as money 0455/11 Oct/Nov 2007

4 In wartime conditions, cigarettes have been used as money. What disadvantage do cigarettes have for trading compared with notes and coins? A They cannot act as a medium of exchange. B They have no intrinsic value. C They lack durability. D They make a double coincidence of wants necessary.

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2007

Q8 · In most countries which organisation controls the banking system? 0455/11 Oct/Nov 2007

6 In most countries which organisation controls the banking system? A central bank B commercial bank C investment bank D World Bank

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2007

Q9 · Which of the following benefits does a stock exchange provide? 0455/11 May/June 2008

7 Which of the following benefits does a stock exchange provide? A a source of finance for private limited companies B a safeguard against the risk of loss C an opportunity to sell shares quickly D an opportunity to purchase foreign currency

1 marks

Answer: C

This question in 0455/11 May/June 2008

Q10 · In many developing countries people grow agricultural products 0455/11 Oct/Nov 2008

4 In many developing countries people grow agricultural products. They sell what they produce to buy other goods. What is required for this system to work? A a subsistence economy B barter C money D ownership of land

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2008

Q11 · What function does a central bank provide for the general public? 0455/11 May/June 2009

10 What function does a central bank provide for the general public? A accepting deposits B issuing banknotes C making loans D providing overdrafts

1 marks

Answer: B

This question in 0455/11 May/June 2009

Q12 · What is a function of a commercial bank? 0455/11 May/June 2010

9 What is a function of a commercial bank? A acting as the lender of last resort B deciding what is a legal tender C determining monetary policy D providing overdrafts

1 marks

Answer: D

This question in 0455/11 May/June 2010

Q13 · One of the functions of money is to act as a measure of value 0455/11 May/June 2010

11 One of the functions of money is to act as a measure of value. What does this mean? A Money allows people to borrow and lend. B Money allows people to save their surplus income. C Money is used to buy goods and services. D Money is used to compare the worth of different goods and services.

1 marks

Answer: D

This question in 0455/11 May/June 2010

Q14 · What is a function of a commercial bank? 0455/12 May/June 2010

5 What is a function of a commercial bank? A acting as the lender of last resort B deciding what is a legal tender C determining monetary policy D providing overdrafts

1 marks

Answer: D

This question in 0455/12 May/June 2010

Q15 · One of the functions of money is to act as a measure of value 0455/12 May/June 2010

12 One of the functions of money is to act as a measure of value. What does this mean? A Money allows people to borrow and lend. B Money allows people to save their surplus income. C Money is used to buy goods and services. D Money is used to compare the worth of different goods and services.

1 marks

Answer: D

This question in 0455/12 May/June 2010

Q16 · A stock exchange is a market in which A a system of barter operates 0455/11 Oct/Nov 2010

9 A stock exchange is a market in which A a system of barter operates. B the interest rate is fixed. C the value of the exchange rate is determined. D shares are bought and sold.

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2010

Q17 · ‘Savers suffer as inflation rises to 4.4 %.’ Which function of money is most involved in… 0455/11 Oct/Nov 2010

10 ‘Savers suffer as inflation rises to 4.4 %.’ Which function of money is most involved in this statement? A means of deferred payments B medium of exchange C store of value D unit of account

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2010

Q18 · A stock exchange is a market in which A a system of barter operates 0455/12 Oct/Nov 2010

10 A stock exchange is a market in which A a system of barter operates. B the interest rate is fixed. C the value of the exchange rate is determined. D shares are bought and sold.

1 marks

Answer: D

This question in 0455/12 Oct/Nov 2010

Q19 · ‘Savers suffer as inflation rises to 4.4 %.’ Which function of money is most involved in… 0455/12 Oct/Nov 2010

11 ‘Savers suffer as inflation rises to 4.4 %.’ Which function of money is most involved in this statement? A means of deferred payments B medium of exchange C store of value D unit of account

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2010

Q20 · A stock exchange is a market in which A a system of barter operates 0455/13 Oct/Nov 2010

11 A stock exchange is a market in which A a system of barter operates. B the interest rate is fixed. C the value of the exchange rate is determined. D shares are bought and sold.

1 marks

Answer: D

This question in 0455/13 Oct/Nov 2010

Q21 · ‘Savers suffer as inflation rises to 4.4 %.’ Which function of money is most involved in… 0455/13 Oct/Nov 2010

12 ‘Savers suffer as inflation rises to 4.4 %.’ Which function of money is most involved in this statement? A means of deferred payments B medium of exchange C store of value D unit of account

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2010

Q22 · What may cause an individual to save a higher proportion of their income? 0455/11 May/June 2011

10 What may cause an individual to save a higher proportion of their income? A a belief that the price of goods will rise in the future B a fall in the rate of interest paid by the country’s banks C a fear that income will fall in the future D a rise in the individual’s wish to enjoy higher consumption immediately

1 marks

Answer: C

This question in 0455/11 May/June 2011

Q23 · A person wishes to buy shares in order to make a long-term profit, but wants as little… 0455/11 May/June 2011

11 A person wishes to buy shares in order to make a long-term profit, but wants as little risk of short-term loss as possible. Which type of share is most likely to meet these wishes? A a share in a coffee growing company B a share in a fashion house C a share in a high-tech electronics company D a share in a supermarket chain

1 marks

Answer: D

This question in 0455/11 May/June 2011

Q24 · Which statement about a country’s banks is correct? 0455/11 May/June 2011

12 Which statement about a country’s banks is correct? A Commercial banks hold the financial accounts of the government. B Commercial banks settle debts by clearing customers’ cheques. C The central bank sets the government’s tax and spending policies. D The central bank supplies foreign currency to members of the public.

1 marks

Answer: B

This question in 0455/11 May/June 2011

Q25 · Which statement about a country’s banks is correct? 0455/12 May/June 2011

11 Which statement about a country’s banks is correct? A Commercial banks hold the financial accounts of the government. B Commercial banks settle debts by clearing customers’ cheques. C The central bank sets the government’s tax and spending policies. D The central bank supplies foreign currency to members of the public.

1 marks

Answer: B

This question in 0455/12 May/June 2011

Q26 · Which statement about a country’s banks is correct? 0455/13 May/June 2011

11 Which statement about a country’s banks is correct? A Commercial banks hold the financial accounts of the government. B Commercial banks settle debts by clearing customers’ cheques. C The central bank sets the government’s tax and spending policies. D The central bank supplies foreign currency to members of the public.

1 marks

Answer: B

This question in 0455/13 May/June 2011

Q27 · Which motive is most likely to increase the wish to open a savings account? 0455/11 Oct/Nov 2011

10 Which motive is most likely to increase the wish to open a savings account? A to have cash immediately available B to prepare for future expenditure C to satisfy essential needs D to widen present consumption choices

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2011

Q28 · Share prices on the stock market are most likely to rise if A employment falls 0455/11 Oct/Nov 2011

11 Share prices on the stock market are most likely to rise if A employment falls. B interest rates fall. C interest rates rise. D tax rates rise.

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2011

Q29 · The ways of making and receiving payments continue to develop 0455/11 Oct/Nov 2011

12 The ways of making and receiving payments continue to develop. As well as cash, debit cards and credit cards, mobile (cell) phones are now being used to make payments. Which method of paying for products provides no information to sellers about their customers? A cash B debit cards C credit cards D mobile (cell) phones

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2011

Q30 · Which motive is most likely to increase the wish to open a savings account? 0455/12 Oct/Nov 2011

11 Which motive is most likely to increase the wish to open a savings account? A to have cash immediately available B to prepare for future expenditure C to satisfy essential needs D to widen present consumption choices

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2011

Q31 · The ways of making and receiving payments continue to develop 0455/12 Oct/Nov 2011

13 The ways of making and receiving payments continue to develop. As well as cash, debit cards and credit cards, mobile (cell) phones are now being used to make payments. Which method of paying for products provides no information to sellers about their customers? A cash B debit cards C credit cards D mobile (cell) phones

1 marks

Answer: A

This question in 0455/12 Oct/Nov 2011

Q32 · Which motive is most likely to increase the wish to open a savings account? 0455/13 Oct/Nov 2011

12 Which motive is most likely to increase the wish to open a savings account? A to have cash immediately available B to prepare for future expenditure C to satisfy essential needs D to widen present consumption choices

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2011

Q33 · Share prices on the stock market are most likely to rise if A employment falls 0455/13 Oct/Nov 2011

13 Share prices on the stock market are most likely to rise if A employment falls. B interest rates fall. C interest rates rise. D tax rates rise.

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2011

Q34 · The ways of making and receiving payments continue to develop 0455/13 Oct/Nov 2011

14 The ways of making and receiving payments continue to develop. As well as cash, debit cards and credit cards, mobile (cell) phones are now being used to make payments. Which method of paying for products provides no information to sellers about their customers? A cash B debit cards C credit cards D mobile (cell) phones

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2011

Q35 · For anything to be used as money, it must be A a fixed value 0455/11 May/June 2012

13 For anything to be used as money, it must be A a fixed value. B in fixed supply. C legal tender. D readily acceptable.

1 marks

Answer: D

This question in 0455/11 May/June 2012

Q36 · For anything to be used as money, it must be A a fixed value 0455/12 May/June 2012

13 For anything to be used as money, it must be A a fixed value. B in fixed supply. C legal tender. D readily acceptable.

1 marks

Answer: D

This question in 0455/12 May/June 2012

Q37 · For anything to be used as money, it must be A a fixed value 0455/13 May/June 2012

13 For anything to be used as money, it must be A a fixed value. B in fixed supply. C legal tender. D readily acceptable.

1 marks

Answer: D

This question in 0455/13 May/June 2012

Q38 · Why do banknotes function as money? 0455/11 Oct/Nov 2012

4 Why do banknotes function as money? A They are backed by gold. B They are durable. C They are generally acceptable. D They have intrinsic value.

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2012

Q39 · What might encourage a consumer to save rather than to spend? 0455/12 Oct/Nov 2012

12 What might encourage a consumer to save rather than to spend? A being made unemployed B discounts on products C government subsidies to producers D high interest rates

1 marks

Answer: D

This question in 0455/12 Oct/Nov 2012

Q40 · Why do banknotes function as money? 0455/12 Oct/Nov 2012

13 Why do banknotes function as money? A They are backed by gold. B They are durable. C They are generally acceptable. D They have intrinsic value.

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2012

Q41 · An individual has various financial assets 0455/13 Oct/Nov 2012

12 An individual has various financial assets. What is the most easily available as cash? A a current (checking) bank account B government bonds C share certificates in a public company D time deposits in a savings bank

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2012

Q42 · Why do banknotes function as money? 0455/13 Oct/Nov 2012

13 Why do banknotes function as money? A They are backed by gold. B They are durable. C They are generally acceptable. D They have intrinsic value.

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2012

Q43 · The use of a mobile (cell) phone to make payments is an example of which function of… 0455/11 May/June 2013

10 The use of a mobile (cell) phone to make payments is an example of which function of money? A a medium of exchange B a standard of deferred payment C a store of wealth D a unit of account

1 marks

Answer: A

This question in 0455/11 May/June 2013

Q44 · A function of money is to act as a measure of value 0455/12 May/June 2013

10 A function of money is to act as a measure of value. What does this mean? A It is used to compare the worth of different goods. B It is used to enable monthly payments for expensive goods. C It is used to pay the price of a good. D It is used for future savings.

1 marks

Answer: A

This question in 0455/12 May/June 2013

Q45 · The use of a mobile (cell) phone to make payments is an example of which function of… 0455/13 May/June 2013

19 The use of a mobile (cell) phone to make payments is an example of which function of money? A a medium of exchange B a standard of deferred payment C a store of wealth D a unit of account

1 marks

Answer: A

This question in 0455/13 May/June 2013

Q46 · Which function of money enables people to compare the worth of different products? 0455/11 Oct/Nov 2013

23 Which function of money enables people to compare the worth of different products? A medium of exchange B standard for deferred payments C store of value D unit of account

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2013

Q47 · Which function of money enables people to compare the worth of different products? 0455/12 Oct/Nov 2013

14 Which function of money enables people to compare the worth of different products? A medium of exchange B standard for deferred payments C store of value D unit of account

1 marks

Answer: D

This question in 0455/12 Oct/Nov 2013

Q48 · What will be the most likely effect of a fall in interest rates on saving and borrowing? 0455/13 Oct/Nov 2013

10 What will be the most likely effect of a fall in interest rates on saving and borrowing? saving borrowing A decrease decrease B decrease increase C increase decrease D increase increase

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2013

Q49 · A merchant travels abroad for a few days to buy samples of low-value goods from a range… 0455/13 Oct/Nov 2013

13 A merchant travels abroad for a few days to buy samples of low-value goods from a range of manufacturers. Which property of money would be least necessary for this to take place smoothly? A acceptability B divisibility C durability D portability

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2013

Q50 · What may cause an individual to save a higher proportion of their income? 0455/12 May/June 2014

8 What may cause an individual to save a higher proportion of their income? A a belief that the price of goods will rise in the future B a fall in the rate of interest paid by the country’s banks C a fear that income will fall in the future D a rise in the individual’s wish to enjoy higher consumption immediately

1 marks

Answer: C

This question in 0455/12 May/June 2014

Q51 · In 2013 there was a period of low interest rates and high inflation in an economy 0455/12 May/June 2014

22 In 2013 there was a period of low interest rates and high inflation in an economy. Who would be most likely to benefit and who most likely to lose during such a period? benefit lose A borrowers savers B consumers on fixed incomes firms wishing to invest C credit card companies sellers of luxury goods D exporters banks

1 marks

Answer: A

This question in 0455/12 May/June 2014

Q52 · What may cause an individual to save a higher proportion of their income? 0455/13 May/June 2014

15 What may cause an individual to save a higher proportion of their income? A a belief that the price of goods will rise in the future B a fall in the rate of interest paid by the country’s banks C a fear that income will fall in the future D a rise in the individual’s wish to enjoy higher consumption immediately

1 marks

Answer: C

This question in 0455/13 May/June 2014

Q53 · In 2008, economic conditions in the UK were uncertain and the rate of inflation increased 0455/13 Oct/Nov 2014

10 In 2008, economic conditions in the UK were uncertain and the rate of inflation increased. It was reported that consumers had increased their purchases of rare stamps which continued to rise in value. What is not a reason for such purchases? A to avoid risk B to diversify their investments C to overcome the effects of inflation D to switch from spending to borrowing

1 marks

Answer: D

This question in 0455/13 Oct/Nov 2014

Q54 · Cigarettes have been used as money in exceptional circumstances 0455/11 May/June 2015

9 Cigarettes have been used as money in exceptional circumstances. What is the most likely reason that they are not acceptable as money in normal circumstances? A cigarettes lack durability B cigarettes lack intrinsic value C cigarettes lack portability D cigarettes lack uniformity

1 marks

Answer: A

This question in 0455/11 May/June 2015

Q55 · A businesswoman seeks a 10-year loan from a bank 0455/12 May/June 2015

9 A businesswoman seeks a 10-year loan from a bank. She has listed her four most valuable possessions which could be offered to the bank in order to obtain the loan. Which item would the bank be least likely to accept as security for the loan? A a collection of gold coins, jewellery and antiques B a house in a desirable part of town C a part ownership in a race horse D a portfolio of government bonds

1 marks

Answer: C

This question in 0455/12 May/June 2015

Q56 · A country’s central bank raised the rate of interest from 1% to 4% per year 0455/11 Oct/Nov 2015

9 A country’s central bank raised the rate of interest from 1% to 4% per year. How would this change have affected the amount saved and the cost of borrowing by individuals? amount saved cost of borrowing A decreased decreased B decreased increased C increased decreased D increased increased

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2015

Q57 · What is the usual reason why citizens trust their country’s banknotes? 0455/11 May/June 2016

9 What is the usual reason why citizens trust their country’s banknotes? A They are acceptable for trade and exchange. B They are backed by gold at the central bank. C They are convertible into the US$ or Chinese Yuan. D They are recognisable and in infinite supply.

1 marks

Answer: A

This question in 0455/11 May/June 2016

Q58 · When will a central bank act as lender of last resort to a commercial bank? 0455/12 May/June 2016

9 When will a central bank act as lender of last resort to a commercial bank? A when a commercial bank faces a liquidity crisis B when a commercial bank fails to make a profit C when a commercial bank needs to raise share capital D when a commercial bank reduces its lending rates

1 marks

Answer: A

This question in 0455/12 May/June 2016

Q59 · What function does a central bank fulfil? 0455/13 May/June 2016

9 What function does a central bank fulfil? A It issues currency. B It offers overdraft facilities to individuals. C It operates deposit accounts. D It raises taxation.

1 marks

Answer: A

This question in 0455/13 May/June 2016

Q60 · Individuals produced their own goods 0455/11 May/June 2017

10 Individuals produced their own goods. They then decided to specialise. They formed a group and offered their skills to each other but without the use of money. What is not likely to be the result for the group? A It will enjoy a rise in its material standard of living. B It will have a wider choice of goods and services. C It will need to use a system of barter. D It will save time in obtaining goods and services.

1 marks

Answer: D

This question in 0455/11 May/June 2017

Q61 · Which statement about financial matters is correct? 0455/12 May/June 2017

8 Which statement about financial matters is correct? A Commercial banks’ main activity is the finance of international trade. B Paper banknotes possess all the desirable properties needed to act as money. C Stock exchanges trade mainly in second-hand stocks and shares. D The central bank acts as the lender of last resort to companies facing bankruptcy.

1 marks

Answer: C

This question in 0455/12 May/June 2017

Q62 · What is a function of a central bank? 0455/11 May/June 2018

8 What is a function of a central bank? A accepting deposits from the public B determining tax rates C implementing monetary policy D lending to businesses

1 marks

Answer: C

This question in 0455/11 May/June 2018

Q63 · What does a commercial bank not provide? 0455/12 May/June 2018

8 What does a commercial bank not provide? A cash B bonds C loans D mortgages

1 marks

Answer: B

This question in 0455/12 May/June 2018

Q64 · What is not a function of a central bank? 0455/13 May/June 2018

8 What is not a function of a central bank? A It is the lender of last resort to financial institutions. B It is the sole issuer of notes and coins. C It lends to individual firms and consumers. D It manages the national debt for the government.

1 marks

Answer: C

This question in 0455/13 May/June 2018

Q65 · What is a function of a central bank? 0455/11 Oct/Nov 2018

8 What is a function of a central bank? A collecting taxes B issuing currency C providing bank accounts for individuals D setting foreign trade tariffs

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2018

Q66 · A central bank acts as a lender of last resort especially in times of financial crisis 0455/12 Oct/Nov 2018

8 A central bank acts as a lender of last resort especially in times of financial crisis. What is the purpose of this function? A to cover credit card debts of consumers B to provide liquidity to the banking system C to remove failing banks from the financial system D to safeguard the profits of the banking system

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2018

Q67 · What is a function of a country’s stock exchange? 0455/13 Oct/Nov 2018

8 What is a function of a country’s stock exchange? A to act as lender of last resort to commercial banks B to provide a market for the purchase and sale of shares C to provide short-term loans for investment D to set interest rates within the country

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2018

Q68 · What is most likely to encourage the immediate purchase of an expensive item such as a… 0455/13 Oct/Nov 2018

11 What is most likely to encourage the immediate purchase of an expensive item such as a new car? A anticipating a fall in the rate of inflation B expecting interest rates to fall C making it easier to obtain a loan D needing to plan for unexpected emergencies

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2018

Q69 · What would be least likely to act as a store of value during a period of rapid inflation? 0455/12 Feb/March 2019

9 What would be least likely to act as a store of value during a period of rapid inflation? A cash B gold C property D shares

1 marks

Answer: A

This question in 0455/12 Feb/March 2019

Q70 · Which advantage do coins have that make them more suitable than banknotes to act as money? 0455/13 May/June 2019

9 Which advantage do coins have that make them more suitable than banknotes to act as money? A They are more divisible. B They are more durable. C They are more portable. D They are more recognisable.

1 marks

Answer: B

This question in 0455/13 May/June 2019

Q71 · An African government has abandoned its own dollar and now uses the US dollar as its… 0455/11 Oct/Nov 2019

9 An African government has abandoned its own dollar and now uses the US dollar as its currency. Why would such a policy have been necessary? A Commercial banks restricted their lending. B Consumers only used credit cards rather than paper money. C Its own dollar no longer acted as a store of value. D The central bank controlled the issue of money too tightly.

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2019

Q72 · What is not normally a function of the central bank of a country? 0455/12 Oct/Nov 2019

9 What is not normally a function of the central bank of a country? A acting as lender of last resort B issuing notes and coins C operating the government’s monetary policy D setting the government’s budget

1 marks

Answer: D

This question in 0455/12 Oct/Nov 2019

Q73 · Which organisations can directly fund the growth of firms? 0455/13 Oct/Nov 2019

9 Which organisations can directly fund the growth of firms? central commercial government bank banks A no yes no B no yes yes C yes no no D yes no yes

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2019

Q74 · What is the most important characteristic of money? 0455/12 Feb/March 2020

9 What is the most important characteristic of money? A It has intrinsic value. B It is generally acceptable. C It is portable. D It is readily available.

1 marks

This question in 0455/12 Feb/March 2020

Q75 · Banks decrease interest rates 0455/12 Feb/March 2020

11 Banks decrease interest rates. What is likely to be the effect of this on borrowing and saving? borrowing saving A falls falls B falls rises C rises falls D rises rises

1 marks

This question in 0455/12 Feb/March 2020

Q76 · What is an advantage to a country of having an efficient commercial banking system? 0455/13 May/June 2020

9 What is an advantage to a country of having an efficient commercial banking system? A It controls the money supply. B It discourages spending. C It encourages tax evasion. D It enables investment.

1 marks

Answer: D

This question in 0455/13 May/June 2020

Q77 · What can a central bank increase in order to reduce consumer borrowing? 0455/11 Oct/Nov 2020

11 What can a central bank increase in order to reduce consumer borrowing? A commercial bank deposits B government spending C the exchange rate D the rate of interest

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2020

Q78 · Which row shows a characteristic of money and a function of money? 0455/13 Oct/Nov 2020

9 Which row shows a characteristic of money and a function of money? characteristic function A acceptability medium of exchange B cash measure of value C divisibility portability D store of value bank deposit

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2020

Q79 · What can a central bank increase in order to reduce consumer borrowing? 0455/13 Oct/Nov 2020

11 What can a central bank increase in order to reduce consumer borrowing? A commercial bank deposits B government spending C the exchange rate D the rate of interest

1 marks

Answer: D

This question in 0455/13 Oct/Nov 2020

Q80 · Which function does a central bank provide for the general public? 0455/12 Feb/March 2021

9 Which function does a central bank provide for the general public? A accepting deposits B issuing banknotes C making loans D providing overdrafts

1 marks

Answer: B

This question in 0455/12 Feb/March 2021

Q81 · It is expected that consumers will use less paper money 0455/11 May/June 2021

9 It is expected that consumers will use less paper money. What is the most likely reason for this? A Inflation reduces the value of paper money. B More ways of making payments will be available. C Other forms of money are more durable. D Paper money will have less intrinsic value.

1 marks

Answer: B

This question in 0455/11 May/June 2021

Q82 · What is the money supply? 0455/13 May/June 2021

17 What is the money supply? A the total quantity of foreign currency available within the economy B the total quantity of money available within the economy C the total quantity of money issued by the central bank D the total quantity of money within commercial banks

1 marks

Answer: B

This question in 0455/13 May/June 2021

Q83 · Which activity is correctly linked to the organisation that provides it? 0455/11 May/June 2022

28 Which activity is correctly linked to the organisation that provides it? organisation activity A central bank regulate the rate of inflation B central bank set direct tax rates C commercial bank manage the government’s financial accounts D commercial bank safeguard the country’s foreign reserves

1 marks

Answer: A

This question in 0455/11 May/June 2022

Q84 · Which activity is correctly linked to the organisation that provides it? 0455/12 May/June 2022

15 Which activity is correctly linked to the organisation that provides it? organisation activity A central bank regulate the rate of inflation B central bank set direct tax rates C commercial bank manage the government’s financial accounts D commercial bank safeguard the country’s foreign reserves

1 marks

Answer: A

This question in 0455/12 May/June 2022

Q85 · Which activity is correctly linked to the organisation that provides it? 0455/13 May/June 2022

15 Which activity is correctly linked to the organisation that provides it? organisation activity A central bank regulate the rate of inflation B central bank set direct tax rates C commercial bank manage the government’s financial accounts D commercial bank safeguard the country’s foreign reserves

1 marks

Answer: A

This question in 0455/13 May/June 2022

Q86 · In a country, inflation is 10% and nominal interest rates are 7% 0455/13 May/June 2022

22 In a country, inflation is 10% and nominal interest rates are 7%. Which group is most likely to benefit from this situation? A borrowers B employers C lenders D savers

1 marks

Answer: A

This question in 0455/13 May/June 2022

Q87 · Which organisations can directly fund the growth of firms? 0455/11 Oct/Nov 2022

9 Which organisations can directly fund the growth of firms? central commercial governments banks banks A no yes no B no yes yes C yes no no D yes no yes

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2022

Q88 · Which advantage do coins have that makes them more suitable than paper banknotes to act… 0455/11 Oct/Nov 2022

10 Which advantage do coins have that makes them more suitable than paper banknotes to act as money? A They are more divisible. B They are more durable. C They are more portable. D They are more recognisable.

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2022

Q89 · Which organisations can directly fund the growth of firms? 0455/12 Oct/Nov 2022

9 Which organisations can directly fund the growth of firms? central commercial governments banks banks A no yes no B no yes yes C yes no no D yes no yes

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2022

Q90 · Which advantage do coins have that makes them more suitable than paper banknotes to act… 0455/12 Oct/Nov 2022

10 Which advantage do coins have that makes them more suitable than paper banknotes to act as money? A They are more divisible. B They are more durable. C They are more portable. D They are more recognisable.

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2022

Q91 · The central bank of a country decreases interest rates to help the economy out of a… 0455/12 Oct/Nov 2022

13 The central bank of a country decreases interest rates to help the economy out of a recession. How is this decrease in interest rates most likely to affect the levels of saving in and borrowing from the country’s commercial banks? saving borrowing A decreases decreases B decreases increases C increases increases D increases decreases

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2022

Q92 · Which organisations can directly fund the growth of firms? 0455/13 Oct/Nov 2022

9 Which organisations can directly fund the growth of firms? central commercial governments banks banks A no yes no B no yes yes C yes no no D yes no yes

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2022

Q93 · Which advantage do coins have that makes them more suitable than paper banknotes to act… 0455/13 Oct/Nov 2022

10 Which advantage do coins have that makes them more suitable than paper banknotes to act as money? A They are more divisible. B They are more durable. C They are more portable. D They are more recognisable.

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2022

Q94 · What is a function of commercial banks? 0455/12 Feb/March 2023

10 What is a function of commercial banks? A accept deposits and savings B lender of last resort to government C manage the national debt D operate monetary policy

1 marks

Answer: A

This question in 0455/12 Feb/March 2023

Q95 · What would be least likely to act as a store of value during a period of rapid inflation? 0455/11 May/June 2023

11 What would be least likely to act as a store of value during a period of rapid inflation? A cash B gold C property D shares

1 marks

Answer: A

This question in 0455/11 May/June 2023

Q96 · A country’s central bank raised the rate of interest from 1% to 4% per year 0455/11 May/June 2023

12 A country’s central bank raised the rate of interest from 1% to 4% per year. How would this change have affected the amount saved and the cost of borrowing by individuals? amount cost of saved borrowing A decreased decreased B decreased increased C increased decreased D increased increased

1 marks

Answer: D

This question in 0455/11 May/June 2023

Q97 · Savers suffer as inflation rises to 4.4% 0455/12 May/June 2023

11 Savers suffer as inflation rises to 4.4%. Which function of money is most involved in this statement? A means of deferred payments B medium of exchange C store of value D unit of account

1 marks

Answer: C

This question in 0455/12 May/June 2023

Q98 · One of the functions of money is to act as a measure of value 0455/12 May/June 2023

12 One of the functions of money is to act as a measure of value. What does this mean? A Money allows people to borrow and lend. B Money allows people to save their surplus income. C Money is used to buy goods and services. D Money is used to compare the worth of different goods and services.

1 marks

Answer: D

This question in 0455/12 May/June 2023

Q99 · Which row shows a characteristic of money and a function of money? 0455/13 May/June 2023

11 Which row shows a characteristic of money and a function of money? characteristic function A acceptability medium of exchange B cash measure of value C divisibility portability D store of value bank deposit

1 marks

Answer: A

This question in 0455/13 May/June 2023

Q100 · When will a central bank act as lender of last resort to a commercial bank? 0455/13 May/June 2023

12 When will a central bank act as lender of last resort to a commercial bank? A when a commercial bank faces a liquidity crisis B when a commercial bank fails to make a profit C when a commercial bank needs to raise share capital D when a commercial bank reduces its lending rates

1 marks

Answer: A

This question in 0455/13 May/June 2023

Q101 · A person planning for old age saves in the form of money rather than goods 0455/11 Oct/Nov 2023

11 A person planning for old age saves in the form of money rather than goods. Which function does money perform when this is done? A medium of exchange B standard of deferred payment C store of value D unit of account

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2023

Q102 · What is not normally a function of the central bank of a country? 0455/11 Oct/Nov 2023

12 What is not normally a function of the central bank of a country? A acting as lender of last resort B issuing notes and coins C operating the government monetary policy D setting the government budget

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2023

Q103 · The ways of making and receiving payments continue to develop 0455/12 Oct/Nov 2023

11 The ways of making and receiving payments continue to develop. Payments can now be made using smartphones, as well as cash, debit cards and credit cards. Which method of paying for products provides no information to sellers about their customers? A cash B debit cards C credit cards D smartphones

1 marks

Answer: A

This question in 0455/12 Oct/Nov 2023

Q104 · In most countries, which organisation controls the banking system? 0455/12 Oct/Nov 2023

12 In most countries, which organisation controls the banking system? A central bank B commercial bank C investment bank D World Bank

1 marks

Answer: A

This question in 0455/12 Oct/Nov 2023

Q105 · What must have happened in a country when it experienced an annual rate of inflation of… 0455/12 Oct/Nov 2023

23 What must have happened in a country when it experienced an annual rate of inflation of 100%? A The money supply doubled. B The price level halved. C The purchasing power of money halved. D The real value of money doubled.

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2023

Q106 · A function of money is to act as a measure of value 0455/13 Oct/Nov 2023

11 A function of money is to act as a measure of value. What does this mean? A It is used for future savings. B It is used to compare the worth of different goods. C It is used to enable monthly payments for expensive goods. D It is used to pay the price of a good.

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2023

Q107 · The table shows information about four financial institutions 0455/12 Feb/March 2024

10 The table shows information about four financial institutions. Which institution is most likely to be a commercial bank? it is the it is owned by government’s shareholders bank A no no B no yes C yes no D yes yes

1 marks

Answer: B

This question in 0455/12 Feb/March 2024

Q108 · Which function of money acts as a measure of value? 0455/12 May/June 2024

15 Which function of money acts as a measure of value? A a medium of exchange B a standard of deferred payment C a store of wealth D a unit of account

1 marks

Answer: D

This question in 0455/12 May/June 2024

Q109 · What function does a central bank provide for an economy? 0455/13 May/June 2024

10 What function does a central bank provide for an economy? A It issues bank notes to encourage spending. B It manages the debt of private sector firms. C It offers high interest rate accounts to encourage savings. D It provides mortgages to encourage home ownership.

1 marks

Answer: A

This question in 0455/13 May/June 2024

Q110 · What is not a function of money? 0455/11 Oct/Nov 2024

10 What is not a function of money? A medium of exchange B portability C store of value D unit of account

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2024

Q111 · What is an important role of a central bank? 0455/12 Oct/Nov 2024

10 What is an important role of a central bank? A attempts to achieve price stability B issues credit cards C provides loans to producers D provides savings accounts for consumers

1 marks

Answer: A

This question in 0455/12 Oct/Nov 2024

Q112 · What is the money supply? 0455/12 Oct/Nov 2024

18 What is the money supply? A the total quantity of foreign currency available within the economy B the total quantity of money available within the economy C the total quantity of money issued by the central bank D the total quantity of money within commercial banks

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2024

Q113 · What is a function of a commercial bank? 0455/13 Oct/Nov 2024

10 What is a function of a commercial bank? A accepting deposits B controlling money supply C issuing notes and coins D lending money to the government

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2024

Q114 · Which function does a central bank provide for the general public? 0455/12 Feb/March 2025

10 Which function does a central bank provide for the general public? A accepting deposits B issuing banknotes C making loans D providing overdrafts

1 marks

Answer: B

This question in 0455/12 Feb/March 2025

Q115 · What is not a form of money? 0455/11 May/June 2025

10 What is not a form of money? A a banknote B a cheque C a coin D a credit card

1 marks

This question in 0455/11 May/June 2025

Q116 · If interest rates fall, what will be the most likely effect on saving and borrowing? 0455/11 May/June 2025

11 If interest rates fall, what will be the most likely effect on saving and borrowing? saving borrowing A decrease decrease B decrease increase C increase decrease D increase increase

1 marks

Answer: B

This question in 0455/11 May/June 2025

Q117 · What is the function of money when it is used to value goods and record transactions? 0455/11 Oct/Nov 2025

10 What is the function of money when it is used to value goods and record transactions? A a medium of exchange B a standard of deferred payment C a store of wealth D a unit of account

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2025

Q118 · What is not a role of the central bank? 0455/12 Oct/Nov 2025

10 What is not a role of the central bank? A to act as the lender of last resort B to hold deposits from the general public C to issue notes and coins D to manage the gold reserves of the country

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2025

Q119 · Why do banknotes function as money? 0455/13 Oct/Nov 2025

10 Why do banknotes function as money? A They are backed by gold. B They are durable. C They are generally acceptable. D They have intrinsic value.

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2025