A1

Question 1

The Four functions of money

Answer 1

Means of exchange
Unit of account
Legal tender
Store of value

Question 2

What is means of exchange?

Answer 2

Allows money to be exchanged between people for goods and services of equivalent value, this makes exchange simpler and makes bartering unnecessary

Question 3

What is unit of account?

Answer 3

Money is used to place value on goods and services so you can exchange money for them.

Question 4

What is store of value?

Answer 4

Money has value and can be stored in the bank to spend on goods and services in the future.

Question 5

What is legal tender?

Answer 5

Money is legal tender and is recognised legally as a form of payment. It is the national currency of a country .

Question 6

royal mint rules £100

Answer 6

any amount

Question 7

Coins are legal tender throughout the United Kingdom for the following amount: £50

Answer 7

any amount

Question 8

Coins are legal tender throughout the United Kingdom for the following amount: £20

Answer 8

any amount

Question 9

Coins are legal tender throughout the United Kingdom for the following amount: £5

Answer 9

Any amount

Question 10

Coins are legal tender throughout the United Kingdom for the following amount: £2

Answer 10

Any amount

Question 11

Coins are legal tender throughout the United Kingdom for the following amount: £1

Answer 11

Any amount

Question 12

Coins are legal tender throughout the United Kingdom for the following amount: 50p

Answer 12

any amount not exceeding £10

Question 13

Coins are legal tender throughout the United Kingdom for the following amount: 20p

Answer 13

any amount not exceeding £10

Question 14

Coins are legal tender throughout the United Kingdom for the following amount: 10p

Answer 14

any amount not exceeding £5

Question 15

Coins are legal tender throughout the United Kingdom for the following amount: 5p

Answer 15

any amount not exceeding £5

Question 16

Coins are legal tender throughout the United Kingdom for the following amount: 2p

Answer 16

any amount not exceeding 20p

Question 17

Coins are legal tender throughout the United Kingdom for the following amount: 1p

Answer 17

any amount not exceeding 20p

Question 18

life events?

Answer 18

getting married, going to university

Question 19

External influences

Answer 19

Factors outside of your control such as interest rates or the state of the economy as this affects wages

Question 20

Interest rates

Answer 20

When they are low people are more likely to borrow and less likely to save and vice Verda

Question 21

Culture?

Answer 21

Different cultures impact on their attitudes to money

Question 22

What are the five life stages?

Answer 22

Childhood, adolescence, young adult, middle age and old age

Question 23

Childhood financial needs?

Answer 23

Limited needs, reliant on parents

Question 24

Financial implications during childhood

Answer 24

Any money gifted is usually spent, their family members may set up a savings account and add money to it regularly

Question 25

Adolescence financial needs

Answer 25

Want to be more independent and become slightly less reliant on parents

Question 26

Adolescence financial implications?

Answer 26

Might have a part time job, willing to save small amounts, partially reliant on pocket money aka parents

Question 27

Young adult financial needs

Answer 27

Going to uni or starting a career, buying a car, renting/buying first home, settling down, starting a family/marriage

Question 28

Young adult financial implications

Answer 28

Taking out a student loan, borrowing money for car, mortgage, eligible for credit cards

Question 29

Middle Age financial needs

Answer 29

Supporting family, saving for children, improving lifestyle

Question 30

Middle age financial implications

Answer 30

Savings account for children, mortgage payments, planning for future (pensions) high expenditure and high income

Question 31

Old age financial needs

Answer 31

Fewer dependents, may downsize, health care

Question 32

Old age financial implications

Answer 32

Mortgage payments stopping, reliant on pension

Question 33

What are the benefits of planning expenditure?

Answer 33

A good credit rating making it easier to borrow money, more money to save and earn interest on which generates income, savings can be used to fund purchases, unexpected expenses easier to cover

Question 34

What are the risks of not planning expenditure?

Answer 34

Getting into debt, insufficient funds to pay loans off, having legal action taken against you or repossession, a poor credit rating limiting your access to loans, inability to save for future

Question 35

Life stage which is partially reliant on pocket money?

Answer 35

Adolescence

Question 36

Life stage which has limited needs and reliant on parents?

Answer 36

Childhood

Question 37

Which life stage may one want to downsize and stop mortgage payments?

Answer 37

Old age

Question 38

Which life stage may ones highest expenditure be healthcare?

Answer 38

Old age

Question 39

Which life stage may one be settling down, getting a mortgage or buying a car?

Answer 39

Young adult

Question 40

Which life stage may one be setting up a savings account for children and trying to improve one’s lifestyle?

Answer 40

Middle age

Question 41

Which factors might affect the role of money in one’s life?

Answer 41

Personal attitudes, interest rates, culture, external influences, life stages, life events