Balbharti Maharashtra State Board Class 11 Economics Solutions
Chapter 2 Money Textbook Exercise Questions and Answers.
1. Complete the correlation:
Question 1.
Primary function of money : Medium of exchange : : ___________ : Transfer of value
Answer:
Secondary function of money
Question 2.
___________ : Basis of credit : : Secondary functions of money : Standard of deferred payments.
Answer:
Contingent function of money
Question 3.
Commodity money : Shells : : ___________ : Credit card
Answer:
Plastic money
Question 4.
Divisibility : Smaller denomination : : ___________ : Easy to carry from one place to another.
Answer:
Portability
Question 5.
Barter system : Goods : : Modern economy : ___________
Answer:
Money
2. Give economic terms:
Question 1.
The act of exchanging goods for goods – ___________
Answer:
Barter System
Question 2.
Provision for making payments in future – ___________
Answer:
Deferred payment
Question 3.
System that makes use of currency for facilitating payments – ___________
Answer:
Digital system
Question 4.
Credit instrument through which bank deposits are transferable – ___________
Answer:
Cheque/Demand Draft
Question 5.
Monetary value stored and transferred electronically by means of computer hard drive or servers – ___________
Answer:
E-money
Question 6.
Money not accounted for in the bank and not disclosed to the government – ___________
Answer:
Black money
3. Choose the correct option:
Question 1.
Arrange in order of evolution of money.
(a) Metallic money
(b) Animal money
(c) Metallic coins
(d) Commodity money
Options:
1) a, b, c, d
2) b, d, a, c
3) d, c, a, b
4) c, a, b, d
Answer:
2) b, d, a, c
Question 2.
Arrange in order of Evolution of money.
(a) Plastic money
(b) Electronic money
(c) Paper money
(d) Credit money
Options:
1) b, d, a, c
2) a, b, c, d
3) d, c, b, a
4) c, d, a, b
Answer:
4) c, d, a, b
4. Identify and explain the concepts from the given illustrations:
Question 1.
Vasantsheth provides coal from his shop to farmers in exchange for foodgrains.
Answer:
Barter System.
The barter system refers to the exchange of goods against goods. In the above case, it is a barter exchange as Vasantsheth exchanges coal against food grains.
Question 2.
Babanrao deposits his money in a nationalized bank.
Answer:
Bank Money.
Bank money or credit money refers to cash deposits saved by people. It can be withdrawn or transferred or demanded by means of cheque, draft, etc. In the above case, it is bank money, because Mr. Babanrao deposits his cash into the bank as deposits.
Question 3.
Charu used her debit card to purchase a shirt for her younger brother.
Answer:
Plastic Money.
Plastic money is optional money in the form of Debit cards and Credit cards. In the above case, Charu purchases a shirt with a debit card. Hence, she is using a form of Plastic money.
Question 4.
Malathi purchased a house through an agent. The agent accepted the commission amount in cash but did not issue a receipt to her.
Answer:
Black money.
Money that is received in cash but not accounted for and on which tax is not paid to Government is called Black Money. In the above case, the agent did not issue a receipt to Malathi, hence it will be a case of Black money.
Question 5.
To prevent misuse/fraudulent use of the national currency, a note ban is imposed on its use at certain times.
Answer:
Demonetization.
Demonetization is a tool to control black money in a country. A note ban is a case of demonetization.
5. State with reasons whether you agree or disagree with the following statements:
Question 1.
There are no difficulties in the barter system.
Answer:
No, I do not agree with the statement.
A barter system is a process of exchange under which people exchange goods and services produced by them with goods and services produced by others. With the progress of civilization, human wants to be multiplied and the barter system of exchange became obsolete. This was because of various inherent limitations. They are as follows:
Question 2.
There are many good qualities found in modern currency.
Answer:
Yes, I agree with the statement.
There are many good qualities found in a modern currency like:
Question 3.
Many tasks are accomplished with money.
Answer:
Yes, I do agree with the statement.
Money performs a number of functions in today’s economy. They are as follows:
Question 4.
Money can be sent anywhere through electronic means.
Answer:
Yes, I do agree with the statement.
6. Answer the following questions on the basis of the following information:
Ganesh travelled to the mall by bus. He gave the conductor ₹ 10 coins for the ticket. He purchased many commodities from the mall. At the billing counter, he gave his credit card for payment but the billing clerk informed him that only debit cards were accepted. Since Ganesh had forgotten his debit card at home, he offered to make payment by cash.
Question 1.
Identify the types of money used in the information.
Answer:
Types of money used in the above information are:
Question 2.
Explain any two of them.
Answer:
(a) Paper money: It is a substitute for metallic money. It consists of paper currency which is issued by the Central Bank of the country. Currency notes of higher denominations are issued by the Central Bank i.e. Reserve Bank of India.
(b) Bank money: It is also called Credit money. It refers to deposits that are in the form of cash saved by the people. Such money can be withdrawn or transferred with the help of instruments like cheques, drafts, etc.
Class 11 Economics Chapter 2 Money Intext Questions and Answers
Find out: [Textbook Page No. 11]
Recent changes introduced by the banks for the safe use of plastic money.
Answer:
Various changes and instructions are given by the banks for the safe use of plastic money:
You Should Know: [Textbook Page No. 11]
Explain the terms legal tender money and non-legal tender money.
Answer:
(i) Legal Tender Money: It is the money that is backed by law and refusal to accept this is punishable by law. It is issued by the Central Bank of the country.
E.g.: Currency note of any denominations like ₹ 5, ₹ 10, ₹ 50, ₹ 100, ₹ 200, ₹ 500, and ₹ 2000.
(ii) Non-Legal Tender Money: It is the money that is generally used by people in final payment but there is no legal compulsion to accept (i.e. no one can force to accept it). It is issued by commercial banks.
E.g. cheques, drafts, bill of exchange, etc.
Find out: [Textbook Page No. 11]
List the various modes of digital transactions.
Answer:
Various modes of digital transactions are Debit cards, Credit cards, Mobile wallets, Internet banking, Digital Payment App (Google pay, Paytm, etc), UPI (United Payments Interface), Mobile Banking, Bank prepaid card, etc.
Chapter 2 Money Textbook Exercise Questions and Answers.
1. Complete the correlation:
Question 1.
Primary function of money : Medium of exchange : : ___________ : Transfer of value
Answer:
Secondary function of money
Question 2.
___________ : Basis of credit : : Secondary functions of money : Standard of deferred payments.
Answer:
Contingent function of money
Question 3.
Commodity money : Shells : : ___________ : Credit card
Answer:
Plastic money
Question 4.
Divisibility : Smaller denomination : : ___________ : Easy to carry from one place to another.
Answer:
Portability
Question 5.
Barter system : Goods : : Modern economy : ___________
Answer:
Money
2. Give economic terms:
Question 1.
The act of exchanging goods for goods – ___________
Answer:
Barter System
Question 2.
Provision for making payments in future – ___________
Answer:
Deferred payment
Question 3.
System that makes use of currency for facilitating payments – ___________
Answer:
Digital system
Question 4.
Credit instrument through which bank deposits are transferable – ___________
Answer:
Cheque/Demand Draft
Question 5.
Monetary value stored and transferred electronically by means of computer hard drive or servers – ___________
Answer:
E-money
Question 6.
Money not accounted for in the bank and not disclosed to the government – ___________
Answer:
Black money
3. Choose the correct option:
Question 1.
Arrange in order of evolution of money.
(a) Metallic money
(b) Animal money
(c) Metallic coins
(d) Commodity money
Options:
1) a, b, c, d
2) b, d, a, c
3) d, c, a, b
4) c, a, b, d
Answer:
2) b, d, a, c
Question 2.
Arrange in order of Evolution of money.
(a) Plastic money
(b) Electronic money
(c) Paper money
(d) Credit money
Options:
1) b, d, a, c
2) a, b, c, d
3) d, c, b, a
4) c, d, a, b
Answer:
4) c, d, a, b
4. Identify and explain the concepts from the given illustrations:
Question 1.
Vasantsheth provides coal from his shop to farmers in exchange for foodgrains.
Answer:
Barter System.
The barter system refers to the exchange of goods against goods. In the above case, it is a barter exchange as Vasantsheth exchanges coal against food grains.
Question 2.
Babanrao deposits his money in a nationalized bank.
Answer:
Bank Money.
Bank money or credit money refers to cash deposits saved by people. It can be withdrawn or transferred or demanded by means of cheque, draft, etc. In the above case, it is bank money, because Mr. Babanrao deposits his cash into the bank as deposits.
Question 3.
Charu used her debit card to purchase a shirt for her younger brother.
Answer:
Plastic Money.
Plastic money is optional money in the form of Debit cards and Credit cards. In the above case, Charu purchases a shirt with a debit card. Hence, she is using a form of Plastic money.
Question 4.
Malathi purchased a house through an agent. The agent accepted the commission amount in cash but did not issue a receipt to her.
Answer:
Black money.
Money that is received in cash but not accounted for and on which tax is not paid to Government is called Black Money. In the above case, the agent did not issue a receipt to Malathi, hence it will be a case of Black money.
Question 5.
To prevent misuse/fraudulent use of the national currency, a note ban is imposed on its use at certain times.
Answer:
Demonetization.
Demonetization is a tool to control black money in a country. A note ban is a case of demonetization.
5. State with reasons whether you agree or disagree with the following statements:
Question 1.
There are no difficulties in the barter system.
Answer:
No, I do not agree with the statement.
A barter system is a process of exchange under which people exchange goods and services produced by them with goods and services produced by others. With the progress of civilization, human wants to be multiplied and the barter system of exchange became obsolete. This was because of various inherent limitations. They are as follows:
Question 2.
There are many good qualities found in modern currency.
Answer:
Yes, I agree with the statement.
There are many good qualities found in a modern currency like:
Question 3.
Many tasks are accomplished with money.
Answer:
Yes, I do agree with the statement.
Money performs a number of functions in today’s economy. They are as follows:
Question 4.
Money can be sent anywhere through electronic means.
Answer:
Yes, I do agree with the statement.
6. Answer the following questions on the basis of the following information:
Ganesh travelled to the mall by bus. He gave the conductor ₹ 10 coins for the ticket. He purchased many commodities from the mall. At the billing counter, he gave his credit card for payment but the billing clerk informed him that only debit cards were accepted. Since Ganesh had forgotten his debit card at home, he offered to make payment by cash.
Question 1.
Identify the types of money used in the information.
Answer:
Types of money used in the above information are:
Question 2.
Explain any two of them.
Answer:
(a) Paper money: It is a substitute for metallic money. It consists of paper currency which is issued by the Central Bank of the country. Currency notes of higher denominations are issued by the Central Bank i.e. Reserve Bank of India.
(b) Bank money: It is also called Credit money. It refers to deposits that are in the form of cash saved by the people. Such money can be withdrawn or transferred with the help of instruments like cheques, drafts, etc.
Class 11 Economics Chapter 2 Money Intext Questions and Answers
Find out: [Textbook Page No. 11]
Recent changes introduced by the banks for the safe use of plastic money.
Answer:
Various changes and instructions are given by the banks for the safe use of plastic money:
You Should Know: [Textbook Page No. 11]
Explain the terms legal tender money and non-legal tender money.
Answer:
(i) Legal Tender Money: It is the money that is backed by law and refusal to accept this is punishable by law. It is issued by the Central Bank of the country.
E.g.: Currency note of any denominations like ₹ 5, ₹ 10, ₹ 50, ₹ 100, ₹ 200, ₹ 500, and ₹ 2000.
(ii) Non-Legal Tender Money: It is the money that is generally used by people in final payment but there is no legal compulsion to accept (i.e. no one can force to accept it). It is issued by commercial banks.
E.g. cheques, drafts, bill of exchange, etc.
Find out: [Textbook Page No. 11]
List the various modes of digital transactions.
Answer:
Various modes of digital transactions are Debit cards, Credit cards, Mobile wallets, Internet banking, Digital Payment App (Google pay, Paytm, etc), UPI (United Payments Interface), Mobile Banking, Bank prepaid card, etc.