A) 1. Functions Of Money

Question 1

What are the 4 functions of money

Answer 1

• unit of account
• means of exchange
• store of value
• legal tender

Question 2

Unit of account

Answer 2

Allows us to place momentary value on goods and services

Question 3

Means of exchange

Answer 3

Allows us to trade as businesses and customers can buy and sell goods and services

Question 4

Store of value

Answer 4

Allows us to use it in the future as it keeps its value

Question 5

Legal tender

Answer 5

A legally recognised form of payment

Question 6

Personal attitudes

Answer 6

Individuals will vary in their attitude to risk and reward as well as saving and borrowing.

Mostly depends on what person you are.

Question 7

Life stages

Answer 7

As you change stages, your financial needs change.

Each stage will affect your needs and attitude to money

Question 8

Culture

Answer 8

Your background or culture, including religious beliefs or ethical principles, may shape your view of money

Question 9

Life events

Answer 9

Events during your life will impact your attitude to money.

These events may be in your control (uni, travelling) or outside your control (financial gains/lose)

Question 10

External influences

Answer 10

Factors outside your control, including the state of the economy, will have an impact.

Question 11

Interest rates

Answer 11

Can have a big impact on whether you save or borrow.
When low, you may be willing to borrow money.
When high, there is more of an incentive to save