Money

Question 1

What is money

Answer 1

Money is a medium of exchange that is centralized generally accepted , or recognize and facilitates transactions of goods and services.

Question 2

Features of money

Answer 2

1. Acceptability - the commodity must be acceptable everyone must accept it .
2. Scarcity-it must be relativity scarce . The item must be available in small quantities .

3.Divisibility- the commodity must be easily divided into small units or fractions.

4.Homogeneous- It must be identical in in look size and weight.

5. Portability - it is portable can be carried around easily .
6. Durability - must be long lasting

Question 3

Functions of money

Answer 3

1. medium of exchange
   2.standard of value
2. store of value
   4.means of deffered payment
   5.measure of value

Question 4

Other instruments of money

Answer 4

1. Credit and debit cards -

Debit cards allow you to spend money by drawing on funds you have deposited at the bank however Credit cards allow you to borrow money from the card issuer up to a certain limit to purchase items or withdraw cash.

2.Cheques -

an order to a bank to pay a stated sum from the drawer’s account, written on a specially printed form.

3.Barter

Is exchanging goods and services without the use of money’

4.Coins and bank notes-

are medium of exchange used to purchase goods and services .

5.Electronic transfer -

An electronic funds transfer (EFT), or direct deposit, is a digital money movement from one bank account to another.

6. Bill of exchange -

is a written order binding one party to pay a fixed sum of money to another party on demand or at some point in the future.

7. Telebanking-

Telephone banking is a service provided by a bank or other financial institution that enables customers to perform over the telephone a range of financial transactions that do not involve cash or financial instruments (such as checks) without the need to visit a bank branch or ATM.

8.Internet banking-

an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution’s website.

9. E commerce -

is the trading of goods and services on the internet.