Topic 1

Question 1

Barter

Answer 1

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

Question 2

Current account

Answer 2

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

Question 3

Denomination

Answer 3

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

Question 4

Divisible

Answer 4

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

Question 5

Double confidence of wants

Answer 5

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

Question 6

Durable

Answer 6

A key feature of money - to be strong enough to use in many transactions.

Question 7

Face Value

Answer 7

The value marked on a coin or note, e.g. £5, £1, 50p

Question 8

Acceptable

Answer 8

One of the key features of money - to be widely accepted

Question 9

Homogenous

Answer 9

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

Question 10

Inflation

Answer 10

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

Question 11

Intrinsic value

Answer 11

The value an item has in itself, e.g gold has value because it is an expensive metal, a banknote does not have intrinsic value because it is a piece of paper

Question 12

Legal tender

Answer 12

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

Question 13

Means of exchange

Answer 13

A function of money - to allow people to make payments

Question 14

Money

Answer 14

Anything widely accepted as a means of making payment

Question 15

Payment mechanism

Answer 15

A means of transferring money from one account to the other, e.g a debit card, cheque.

Question 16

Fiduciary value

Answer 16

Value based on trust in the banking system

Question 17

Purchasing power

Answer 17

The quantity of goods or services that money can buy

Question 18

Rate of exchange

Answer 18

How much one item is worth in terms of a different item, e.g. One bag of flour is worth four nails, one £ is 1.5 euros, etc.

Question 19

Recognisable

Answer 19

A key feature of money - to be easily identified as genuine money

Question 20

Representational Value

Answer 20

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

Question 21

Scarce but sufficient

Answer 21

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

Question 22

Transaction

Answer 22

Buying or selling something

Question 23

Unit of account

Answer 23

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

Question 24

Portable

Answer 24

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