functions and roles of money

Question 1

what is unit of account?

Answer 1

the monetary value we put on a good/service

Question 2

means of exchange

Answer 2

trading of goods

Question 3

store of value

Answer 3

storing money to use in the future i.e. pension

Question 4

legal tender

Answer 4

cash, card money in general - legally recognised form of payment

Question 5

personal attitudes

Answer 5

attitudes may vary to things like saving, borrowing and investing. Some people can be risk averse while others thrive on it.

Question 6

life stages

Answer 6

more on personal attitudes. A middle ages person with kids may focus more on saving as opposed to someone in their early 20’s who might be more prone to investing.

Question 7

culture

Answer 7

affected by tradition, religion and ethical beliefs. this will impact their attitudes towards money.

Question 8

life events

Answer 8

events could change the way you perceive money and your attitudes towards it.

Question 9

external influences

Answer 9

factors outside of our control such as overall economy. economy will impact wages, then amount of jobs available then moral of the people then prices then cost of overall living etc. Will change peoples perceptions of money.

Question 10

interest rates

Answer 10

when interest rates are low, may be more willing to to borrow money/ spend on credit. When interest is high there is more of an incentive to save .