Historical Development of Money - SS1 Economics Past Questions & Answers - page 1

1

What is the earliest form of trade?

A

Bartering

B

Paper money

 

C

Credit card

CORRECT OPTION: a
2

What was the first commodity used as money?

A

Cowrie shells

 

B

Precious metals

C

Salt

CORRECT OPTION: a
3

What are the two main types of money?

A

Physical currency and digital currency

 

B

Coins and bank deposits

 

C

Bartering and commodities

CORRECT OPTION: a
4

What was the problem with bartering as a means of trade?

 

Bartering required a coincidence of wants between two parties, which made trade difficult.

5

How was this problem solved?

To solve the problem of bartering, people began using commodities such as cowrie shells, salt, and precious metals as a medium of exchange. These commodities eventually evolved into coins and paper money, which became widely accepted in trade and commerce.

 

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