These eight original questions cover the four lessons in money, banking and income. They rise in difficulty, and every answer is explained.
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Questions 1 to 4: concepts
Question 1. Amin pays RM12 for lunch with a RM50 note and receives change. Name the function of money shown and explain it in one sentence.
Answer
Money is working as a medium of exchange. Amin and the seller do not need to find someone who wants what the other has, because both accept money for the lunch.
Question 2. A shop prices a school bag at RM80 and a pen at RM2. Which function of money lets you compare the two prices, and what does it allow?
Answer
The unit of account (measure of value). Because both goods are priced in ringgit, the buyer can compare them directly and see that the bag costs 40 times as much as the pen (80 ÷ 2 = 40).
Question 3. Match each role to the better institution: (a) issues banknotes and sets monetary policy, (b) accepts deposits from the public and lends to businesses. Choose between a commercial bank and the central bank.
Answer
(a) The central bank, which in Malaysia is Bank Negara Malaysia. (b) A commercial bank. The central bank serves the government and the banking system, while commercial banks serve the public directly.
Question 4. Sort these into wages, rent, interest or profit: (a) a teacher’s monthly salary, (b) money a landlord receives for a flat, (c) a saver’s fixed-deposit return, (d) what a stall owner keeps after paying all costs.
Answer
(a) Wages, payment for labour. (b) Rent, payment for use of property. (c) Interest, payment for lending money. (d) Profit, the reward to the entrepreneur who takes the risk.
Questions 5 to 8: reasoning and figures
Question 5. Mei Ling puts RM300 each month into a savings account so she can buy a laptop later. Which function of money does this show, and how can rising prices weaken it?
Answer
It shows the store of value function: she keeps purchasing power for later. If prices rise before she spends the savings, the same ringgit buys fewer goods, so the stored value falls in real terms.
Question 6. A family earns salary RM3 000 and rent from a room RM600. Calculate the share of income from each source and say which source depends on owning property.
Answer
Total income = 3 000 + 600 = RM3 600. Salary = 3 000 ÷ 3 600 × 100 = 83.3%. Rent = 600 ÷ 3 600 × 100 = 16.7%. The rent depends on owning property, so it is income from land or property, unlike salary, which is income from labour.
Question 7. A budget shows income RM2 800 and spending: food RM700, rent RM800, transport RM300, loan RM400, savings RM300, leisure RM350. Find the balance and state whether it is a surplus or deficit.
Answer
Total spending = 700 + 800 + 300 + 400 + 300 + 350 = RM2 850. Balance = 2 800 − 2 850 = −RM50, so there is a deficit of RM50.
Question 8. Using Question 7, recommend one change and show that it fixes the problem. Then state one thing your recommendation leaves unchanged.
Answer
Reduce leisure from RM350 to RM300. New spending = 2 850 − 50 = RM2 800, which equals income, so the budget is balanced. The recommendation leaves rent, the loan and savings unchanged, so the household’s fixed commitments and savings goal are protected.
If you got these wrong
- Questions 1, 2 and 5: revisit explaining the functions of money.
- Question 3: revisit comparing roles of financial institutions.
- Questions 4 and 6: revisit distinguishing sources of personal income.
- Questions 7 and 8: revisit interpreting a budget using supplied figures.
Record each slip in the mistake log. For a teacher to go through your attempts with you, see online one-to-one Economics tuition.