A.1 Functions and Role of Money Flashcards
1
Q
Unit of Account
A
Money is the ruler by which other values are measured
2
Q
Means of Exchange
A
Money serves as a medium of exchange
3
Q
Store of Value
A
Money can be saved or exchanged at a later date
4
Q
Legal Tender
A
Money is recognised in every country as a genuine form of payment . It must be accepted as a payment for debt, goods and services.
5
Q
Factors that influence the role of money.
A
Personal attitudes toward risk and reward
Spending
Saving
Borrowing
6
Q
Interest Rates
A
Interest rate is the reward for saving and the cost of borrowing expressed as a percentage of the money saved or borrowed
7
Q
Principles of Personal Finance
A
Avoid getting into debt Control costs Avoid legal action Generate income and savings Manage money to fund purchases Avoid bankruptcy Maintain a good credit rating Remain solvent(financially stable)
