Eco 💵 Flashcards
Q: What is the barter system?
A: Direct exchange of goods for goods without money.
Q: What is the main limitation of the barter system?
A: Direct exchange of goods for goods without money.
Q: Why is indivisibility a problem in barter?
A: Some goods (e.g.
a horse) cannot be divided without losing value.
- Evolution of Money
Q: What replaced the barter system?
A: Commodity money (e.g.
salt
Q: What are the drawbacks of commodity money?
A: Heavy
hard to transport
Q: What is fiat money?
A: Government-issued currency not backed by a physical commodity (e.g.
modern paper money).
Q: How did checks improve the payment system?
A: Reduced theft risk
eliminated bulk transport
Q: What is EMOP?
A: Electronic Means of Payment (e.g.
credit cards
- Ethiopian Monetary History
Q: What was the first coin used in Ethiopia?
A: Axumite coins (3rd century AD).
Q: What commodity was widely used as money in Ethiopia?
A: Salt bars (amole).
Q: Which foreign coin was popular in Ethiopia until 1945?
