Question

Explain the relationship between Money and Price.

Answer 1

1. The relationship between money and price is connected with the Monetary policy.
2. There is a close relationship between the growth of money supply and inflation.
3. Price controls play a very important role in a country’s economic stability.
4. This role is played by RBI.
5. Currency is the medium of exchange in a country.
6. The Indian currency is called the Indian Rupee (INR).
7. In a country, the foreign currency is called foreign exchange.
8. The purchasing capacity of all currencies in the world is compared using the US dollar as the standard currency.
9. This value differs from country to country.
10. Most of the international trade transactions are carried out in the US dollars.