Economics Paper 2, Nov/Dec. 2011  
Questions: 1 2 3 4 5 6 7 8 9 10 11 12 Main
General Commsents
Question 8

(a)        What is a legal tender?
(b)        Describe any four attributes that an item must possess to act as a medium of exchange.


This was another popular question with the candidates.  They were able to provide satisfactory answers for the (a) and (b) parts of the question.  Candidates’ performance in this question was above average.

The following are some of the points given by the candidates who scored high marks in this question.
(a)        legal tender is money (or any item) which by law must be accepted in exchange for goods and services and in the settlement of debts.

(b)        for a commodity to act as a medium of exchange, it must be

(i) generally accepted within the community;
(ii) divisible;
(iii) portable;
(iv) durable
(v) relatively scarce.

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