This question was also popular among the candidates and their performance was below average. Candidates were required to define money, explain value of money and the demand for money and to identify any four determinants of transactions demand for money in the (a), (b) and (c) parts of the question respectively. Majority of the candidates were able to define money but unable to explain the concepts of value of money and demand for money in the (a) and

(b) parts of the question respectively. The few candidates that were able to state the determinants of transactions demand for money, could not expatiate on their points in the (c) part of the question. Candidates were expected to answer thus to score maximum marks in this question.

(a) Money is anything that is generally acceptable as a medium of exchange and used in the settlement of debts.

(b)(i)  The value of money is the amount of goods and services a given monetary unit can buy. The greater the amount of goods and services that can be purchased with a given unit of money, the greater the value of money and vice-versa.
(ii)   The demand for money is a derived demand. It is the desire to hold money in liquid form rather than investing it in stocks and bonds. People hold money for transactions, precautionary and speculative motives  

(c) (i)    Level of income: The higher the amount of income one earns, the higher the amount of money that would be held to meet day-to-day expenses.

(ii)   Interval between pay days: The shorter the interval between pay days, the lower the amount of money to be held while the longer the interval, the more the amount to be held.

(iii)  The rate of interest: The higher the rate of interest, the lower the amount held for   transactions and vice versa.

(iv)  The price level: If the price level is high, more money has to be held to meet daily transactions and vice versa.

(v)   Status in the society: A well placed man in the society is expected to hold a large sum of money to maintain his status.

(vi)  The size of one’s family: A person with a large family is expected to hold more money and vice versa.

(vii) Personal tastes: A person with a high taste for goods will normally hold more money.

(viii)Availability of credit facilities reduces the tendency to hold more money for transactions.

(ix)  Advancement in technology in the banking sector e.g. e-banking, debit card etc. reduces   the amount of money held for transactions