1.2 The features of money

Question 1

acceptable

Answer 1

accept money as payment if they are confident that others , in turn, will accept it as payment in later transactions

Question 2

what are 2 reasons why are people prepared to accept money?

Answer 2

-people have faith that coins and banknotes are worth their face value e.g. the promise on banknotes
-faith in the monetary system is that sellers will receive the funds transferred between accounts.

Question 3

recognisable

Answer 3

needs to be recognisable so people are confident that they are receiving genuine coins and banknotes

Question 4

stable

Answer 4

needs to hold its value so people will be confident that it will be worth the same, or similar in the future (inflation)

Question 5

divisible

Answer 5

• variety of denominations
• combinations
• receive change

Question 6

durable

Answer 6

need to be strong enough to be used many times (polymer

Question 7

portable

Answer 7

money needs to be carried around, or transferred

Question 8

scarce but sufficient

Answer 8

make sure thereis not too much cash in circulation as the value of money falls (inflation)

Question 9

homogenous

Answer 9

needs to look and feel the same so it is recognisable, therefore the main features need to remain the same