Topic 1 Flashcards

1
Q

Acceptable

A

One of the key features of money – to be widely accepted.

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2
Q

Barter

A

To exchange goods and services for other goods and services without using money.

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3
Q

Current account

A

Bank or building society accounts where people can store their money in the form of electronic balances and withdraw it to make payments.

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4
Q

Denomination

A

A group of coins or notes that share the same face value.

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5
Q

Divisible

A

A key feature of money – to be easily divided into amounts of different value.

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6
Q

Double coincidence of wants

A

A situation in which two people have goods or services to trade and each wants what the other person can provide.

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7
Q

Durable

A

A key feature of money – to be strong enough to be reused in many transactions.

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8
Q

Face value

A

The value marked on a coin or note (eg 1p, 2p, 5p, £5, £10). Fiduciary value Value based on trust in the banking system.

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9
Q

Homogeneous

A

A key feature of money – to look and feel the same as other coins and notes of the same denomination.

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10
Q

Inflation

A

A rise in prices, which means that the purchasing power of money falls.

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11
Q

Intrinsic value

A

The value that an item has in itself, eg a bag of rice has intrinsic value because it is a staple food; a solid gold coin has intrinsic value because it is made of a precious metal; a banknote does not have intrinsic value because it is a piece of paper or polymer.

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12
Q

Legal tender

A

Coins or banknotes that must be accepted if offered in payment of a debt.

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13
Q

Means of exchange

A

A function of money – to allow people to make payments.

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14
Q

Money

A

Anything widely accepted as a means of making payments.

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15
Q

Payment mechanism

A

A means of transferring money from one account to another eg debit card, cheque.

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16
Q

Portable

A

A key feature of money – to be small and light enough to carry around easily.

17
Q

Purchasing power

A

The quantity of goods or services that money can buy.

18
Q

Rate of exchange

A

How much one item is worth in terms of a different item, eg one bag of flour is worth four nails, one British pound is worth 1.5 euros, etc.

19
Q

Recognisable

A

A key feature of money – to be easily identified as genuine money.

20
Q

Representational value

A

The value that an item represents rather than the value it has in itself: a banknote is just a piece of paper or polymer but it represents the value that is printed on it.

21
Q

Scarce but sufficient

A

A key feature of money – to be available in sufficient quantities to meet people’s needs but not in such quantities that the value of money falls.

22
Q

Store of value

A

An attribute of money that allows people to store money now and spend it later.

23
Q

Transaction

A

Buying or selling something.

24
Q

Unit of account

A

A function of money – to allow people to compare prices and to measure the value of money in a bank account, etc.