IBRAHIM ABD.

SANA
BB11110190
BC30803 ISLAMIC FINANCIAL ECONOMICS
MID-TERM EXAM
QUESTION 1
a. Explain the main sources of Islamic Law in Islamic economics.
There are several sources of Islamic Law in Islamic economics as follows:
1. Al-Quran
Al-quran is the main source of Islamic Law. Al-quran is a source of guidance, ruling, and
knowledge from Allah. It guides every aspect of a Muslim life. In Islamic economics Al-quran
plays a vital role. It contains rules on how economics should be run namely the dos and the
donts in economics. The most significant aspect of economics stated in the Quran is the
prohibition of riba (interest).
2. Sunnah
Linguistically, Sunnah means a path or a way. Sunnah refers to all that is narrated from
the Prophet (saw), his acts, his sayings, whatever he tacitly approved, and all the reports
describe his physical attributes and character.
3. Hadith
Hadith is the record of the Sunnah conveying the sayings, actions (deeds and practices),
or the approvals of the Prophet (saw). Different types of Hadith exist due to the method of
transmission, number of reporters in each class, and the authentically of the Hadith.
4. Ijma
Ijma has two meanings. First is to determine and second is to agree upon something.
Ijma is a consensus whether from the society or Islamic scholars. There are many types of Ijma
such as Ijma al Ummah, and Ijma al Mujtahideen.
5. Qiyas
Linguistically, Qiyas means measurement. In juristic term, Qiyas is the extension of an
Islamic Law (Shariah) ruling from an original case to a new case because of the equivalence of
the causes underlying them (lila). Amomg the condition of Qiyas is that there is no existing
ruling from the Quran, Sunnah, and Ijma as Sahabah for the new case.
6. Istihsan
Istihsan literally means to approve or to do something preferable. In juristic term,
Istihsan is defined as shifting from one Qiyas to another Qiyas due to a reason or suspending a
Qiyas for a reason. There are several options for Ihtihsan such as Ihtihsan by Qiyas which is
shifting from a ruling of Qiyas to another ruling of Qiyas due to a stronger reason. Other option
is Ihtihsan by Sunnah which is cancelling the Qiyas due to a contradiction caused by the Hadith.
7. Ijtihad
Ijtihad literally means striving or self-exertion in any activity which entails a measure of
hardship. As a juristic term, Ijtihad means exhausting all of ones efforts in studying a problem
thoroughly and seeking a solution for it from the sources of Shariah. A person who performs
Ijtihad is a Mujtahid (pl. Mujtahideen); whereas, a person who knows the rules of Shariah in
detail, but is unable to extract rules directly from their sources, is not a Mujtahid but rather a
Faqih, Mufti, or a Qaadi.








b. Explain carefully what is mean by MONEY according to Islamic perspective.