Answer to Question #134864 in Macroeconomics for December

Question

9. Which of the following statements concerning money is correct?
[1] The value of money is not based on the confidence that both government and monetary
authorities will be able to control the supply to achieve stability and that the purchasing
power does not fall.
[2] Paper money was developed since specialisation between countries led to increases in
trade, causing the use of coin to be inconvenient as this was difficult to handle and not safe
to transport.
[3] Credit cards are money because they function as a medium of exchange.
[4] Electronic money is another form of money as it can be used as a means of payments.

Answer 1

[2]Paper money was developed since specialisation between countries led to increases in trade, causing the use of coin to be inconvenient as this was difficult to handle and not safe to transport.