money

Question 1

what is barter

Answer 1

barter is the exchange of goods and services for other goods without the use of money

Question 2

disadvantages of barter

Answer 2

1)Is not possible if there is no double coincidence of wants.

2)does not allow for wealth to be stored over time

3)often a lack of equitable exchange rate

Question 3

advantages of barter

Answer 3

1)increased availability of goods

2)facilitates trade without money

3)enables the disposal of surplus production

Question 4

functions of money

Answer 4

1)medium of exchange-money is generally accepted as a payment for most goods

2)a store of value-you can save money because it keeps its value

3)as a standard of deferred payment-borrowers are able to borrow money and pay it back at a later date

Question 5

bill of exchange

Answer 5

an unconditional order from from person to another agreeing to make a payment in the future

Question 6

advantage of bill of exchange

Answer 6

payment is guaranteed at a specific date

Question 7

disadvantage of bill of exchange

Answer 7

often does not give instant funds

Question 8

electronic transfer

Answer 8

any transfer of funds made electronically

Question 9

advantage of electronic transfer

Answer 9

speed of transactions

Question 10

disadvantage of electronic transfer

Answer 10

online fraud

Question 11

tele-banking and e-commerce

Answer 11

tele-banking is making banking transactions over a computer network

e-commerce is trading goods using online communications

Question 12

advantage of telebanking and e-commerce

Answer 12

easy to use from anywhere with a phone or internet access

Question 13

disadvantage of tele-banking and e-commerce

Answer 13

security can be an issue sometimes

Question 14

cheque

Answer 14

the persons wanting to make payment fills out the cheque to instruct their bank to pay a set sum to a specific payee

Question 15

advantage of cheque

Answer 15

guaranteed means of payment

Question 16

disadvantage of cheque

Answer 16

they are becoming less widespread as they are being replaced by online payment systems

Question 17

money order

Answer 17

a printed order for payment of a specified sum, issued by a bank or Post Office.

Question 18

advantage of money order

Answer 18

enables the transfer of money for those who do not have bank account

Question 19

disadvantage of money order

Answer 19

slow process when compared to electronic means of transferring funds

Question 20

debit card

Answer 20

means of payment where the details from the card is ‘read’ by a card machine and funds are directly and immediately transferred from the user’s account to the account they are paying

Question 21

advantage of debit card

Answer 21

ease of use for making payments

Question 22

disadvantage of debit card

Answer 22

money comes out instantly so if the money is not in the account it will become overdrawn and liable for fines

Question 23

advantage of coins and bank notes

Answer 23

easy to use

Question 24

disadvantage of coins and bank

Answer 24

forgery is common and the government has to continuously find ways to prevent it from circulating

Question 25

credit card

Answer 25

card used to make a payment on credit

Question 26

advantage of credit card

Answer 26

users can borrow money before the actually have the money themselves

Question 28

bank draft

Answer 28

a check made out by a bank on behalf of a customer to allow the customer to make a substantial payment

Question 29

advantage of bank draft

Answer 29

guaranteed availability of funds

Question 30

disadvantage of bank draft

Answer 30

bank drafts could be lost or stolen