Content

Question 1

Describe the role of money.

Answer 1

money is the means people use to make payments, money is used as a medium of exchange

Question 2

What are the functions of money?

Answer 2

There are 4 functions of money (MUSS)

1) to be used as a Medium of exchange
2) A unit of account
- places value on goods and services
3) a Store of value
- can be kept in the form of long term deposits and used only when needed in the future
4) Standard of deferred payment
- purchases of goods and services on credit and paying later.

Question 3

Characteristics of money

Answer 3

There are 7 characteristics of money (DADPURR)

1) Divisible
2) Acceptable
3) Durable
4) Portable
5) Uniform
6) Relatively scarce in value
7) Relatively stable in value

Question 4

Problems with Barter

Answer 4

6 problems with barter were: (RDDPPS)

1) Rate of exchange
2) Double coincidence of wants
3) Divisibility
4) Portability
5) Perishability
5) Storage

Question 5

Gold standard

Answer 5

A monetary system where the standard unit of currency is a fixed quantity of gold or is kept at a fixed quantity of gold.

Question 6

Types of Economic systems

Answer 6

There are 4 types (TPFM)

1) Traditional (Subsistence)
2) Planned/Command(Socialist)
3) Free Market/ Capitalist
4) Mixed (Public and Private)

Question 7

Traditional Economies

Subsistence

Answer 7

A traditional economy is one that doesn’t operate under a profit motive.
It is based on culture and rituals.

Question 8

Command/ Planned Economy

Socialist

Answer 8

An economic system controlled by the government, where the means of production are publically owned and they rely on the government to make decisions

Question 9

Free Market/ Capitalist

Answer 9

The free market is an economic system based on supply and demand with little or no government control.

Question 10

Mixed market (Private and public)

Answer 10

An economic system with little government involvement and some free market concepts

Question 11

Functional areas of a business

Answer 11

There are 5 functional areas of a business.(PMFHR)

1) Production
2) Marketing
3) Finance
4) Human resource
5) Research development

Question 12

Production

Answer 12

Production is the process of using raw materials(inputs) and transforming them in some way into product goods and services (outputs)

Question 13

Functions of production

Answer 13

There are 7: PSM C MEW

1) Purchasing of raw materials
2) Scheduling the production process
3) Making the product
4) Controlling the production process
5) Maintaining an adequate inventory system
6) Establishing quality control procedures
7) Warehousing finished goods

Question 14

Marketing

Answer 14

to identify, anticipate and satisfy the customers’ wants

Question 15

Functions of Marketing

Answer 15

There are 7: MDPP SDA

1) Market research
2) Designing the product
3) Pricing
4) Publicising
5) Sales promotion
6) Distribution of the product
7) After-sales service, repairs and refunds

Question 16

Financial Function/Accounting

Answer 16

Responsible for financial planning and organising financial transactions

Question 17

Functions of Accounting

Answer 17

There are 4: PAME
1)Producing the final accounts
(Trading P&L, Bal sheet)
2)Advising management on all financial matters
3)Making all payments on behalf of the company
4)Establishing hire purchase and credit control measures

Question 18

Human resources(Personnel Function)

Answer 18

concerned with employees’ welfare

Question 19

Human resources function

Answer 19

There are 8:
Root The Problem, My Dear Work, Many Carry
1)Recruit staff
2)Train staff
3)Promotion of workers
4)Maintaining a good industrial climate
5)Discipline workers
6)Welfare of workers (sick leave, wages…)
7)Maintaining staff employment records
8)Carrying out a social role (providing canteen facilities, healthy environment, forming credit unions…etc)

Question 20

Research and developmemt

Answer 20

responsible for developing new products (important for research-based industries such as pharmaceuticals and technology) It works closely with Production and Marketing

Question 21

Research and development function

Answer 21

There are 3: CFC

1) Conducting customer research
2) Financial research
3) Conducting feasibility studies and piloting projects

Question 22

Internal Stakeholders of a business

Answer 22

1) Owners/shareholders
2) Board of directors
3) Managers
4) Employees

Question 23

Internal Stakeholders of a business

Answer 23

1) Owners/shareholders
2) Board of directors
3) Managers
4) Employees

Question 24

1)Owners/shareholders

roles:

Answer 24

• to provide financial capital

- to ensure managers are fulfilling the objectives of the business and effectively using the resources.

Question 25

2)Board of directors

Answer 25

• to develop strategies for targets
• make decisions on profit and capital investments
• ensure management objectives are in sync with the business’ overall objectives
• ensure that the activities of the business and its financial statements are in accordance with the government

Question 26

3)Managers

Answer 26

• ensure that the business’ goals are achieved
• To maximise profit /make maximum returns on investments
• ensure that the employees are productive and treated fairly

Question 27

4)Employees

Answer 27

-to perform duties to ensure that the business continues to maximise profit and that their jobs remain secure.

Question 28

External Stakeholders of a business

Answer 28

1) Government
2) Customers
3) Suppliers
4) Competitors
5) Lending institutions
6) Potential investors
7) The community