II. Choose the correct answer from the given alternatives and write the letter of
your choice on the space provided.
6. Which one is the main advantage of paper currency over
commodity money?
A. It is more valuable.
B. It is easier to counterfeit.
7. Cheques are a form of:
A. Commodity money
B. Fiat money
C. It is lighter and easier to transport.
D. It is less durable.
8. E-money (electronic money) refers to:
A. Paper currency
B. Coins
9. In Ethiopia, the Birr is:
C. Checks
C. Paper-based credit
D. Electronic money
D. Money transferred using credit card
A. Most common form of commodity money
B. Unit of account used during the barter system
C. Current national currency
D. First form of paper money used in the country
10. Money as a unit of account is used to:
A. Store purchasing power
B. Measure the value of goods and services
C. Facilitate trade
D. Cover unexpected expenses
11. The medium of exchange function of money allows:
A. People to store wealth over time
B. Prices to be compared easily
C. Transactions to take place without bartering
D. People to borrow and lend money



Answer :

Sure! Here are the correct answers to the questions provided: 6. The main advantage of paper currency over commodity money is that it is lighter and easier to transport. This makes paper currency more convenient for everyday transactions compared to carrying around heavy commodity money like gold or silver. 7. Cheques are a form of fiat money. Fiat money is currency that has no intrinsic value and is declared legal tender by a government, such as paper money or coins. Cheques represent a promise of payment from a bank and are a widely accepted form of payment in modern economies. 8. E-money (electronic money) refers to money transferred using credit cards or other electronic means. It is a digital form of currency that can be used for online transactions and payments without the need for physical cash. 9. In Ethiopia, the Birr is the current national currency. It is the legal tender used for daily transactions and represents the official monetary unit of the country. 10. Money as a unit of account is used to measure the value of goods and services. It serves as a common benchmark for pricing and comparing different products, making trade and economic transactions more efficient. 11. The medium of exchange function of money allows transactions to take place without bartering. Money acts as a widely accepted intermediary that simplifies trade by eliminating the need for direct exchange of goods or services, enabling smoother and more complex economic activities.