Social Science : Economics
MONEY AND CREDIT
IV. Give short answers:
1. Why was money invented?
The invention of Money:
• As years went by there were issues found in barter system and measuring the quantity an value of the goods exchanged.
• To solve these issues they fixed a common item with a standard value for exchange of goods. It was usually in the form some metal. The metals can be termed as the first form of money.
2. What is ancient money?
Gold, silver and copper were the metals used first as barter and they were called "Ancient currency".
3. What were the items used as barter during olden days?
• Corn and even Slaves.
4. What is spice route? Why was it called so?
• From the eastern sea of Tamilnadu Paper, Spices, Pearls, Gems, rubies and muslin cloths were exported.
• Pepper and spices took a major share of the exports and so then route was called "Spice Rank".
5. What is natural money?
• Silver and gold gained importance all over the world. These metals were used as standard. Value in the exchange of goods. This was called "Natural Money"
6. Why were coins of low value printed in large quantities?
Coins of low value were printed in large members,
• While trage prospered, there were insufficient of gold and sliver. Mines also had a limited reserve.
• The coins mads using metals of lesser value were used to buy and sells goods of lesser value and of the money of the poor.
7. What is meant by foreign exchange?
• Currency is the medium of exchange in a country. In a country the foreign currency is called (Indian currency → Indian Rupee)
• Purchasing capacity of all currencies in the world area compared using the US doller as the standard currency. This Value differs from country to country.