Purpose of money Flashcards
Describe term money.
verifiable record that’s generally accepted as payment for goods and services
What is batering
Exchange in valuable products for another, between two individuals
What is intrinsic value
Value of the item it has in its self
- Gold coin = valued material
What is representative value?
Value an item represents rather than the value it has in itself.
Banknote – different by value it has
What is face value?
Value marked on a coin or note.
What is inflation?
Increase in price, decrease in value
What’s purchasing power?
Quantity of goods or services that money can buy
What’s personal life cycle?
Stages through which people pass by between birth and death
What is level income?
Determine how much they’re able to afford for needs / wants / aspirations
What is risk adverse?
Someone who avoids taking risk
What is risk tolerant?
Someone who is willing to take more risks.
what are the four categories of risk?
Physical risk
Emotional risk
Risk to reputation & financial risk
What enables a bank note to fulfil its purpose as money?
Acceptable, Recognisable, Divisible
Durable, Portable,Scarce and homogeneous
