Topic 1 Flashcards
Acceptable
One of the key features of money - to be widely accepted
Barter
To exchange goods and services with other goods and services without the use of money
Current Account
an account where people can store there money in the form of electric balances and withdraw it to make money
Denomination
a group of coins or notes that share the same face value
Divisible
A key feature of money - to be easily divided into amounts of different value
Double coincidence of wants
a situation in which two people have goods or services to trade and they both want what each other has
Durable
to be strong enough to be reused in many transactions
Face value
the value marked on a coin or note e.g. 1p, 2p, 5p, £5, £10
Fiduciary value
value based on trust in the banking system
Homogeneous
when all coins and notes look and feel the exact same
Inflation
a rise in prices, which means that purchasing power of money falls
Intrinsic value
the value that an item has in itself e.g. a solid piece of gold has intrinsic value because its made fo a precious metal but a £20 note doesn’t because its made of paper.
Legal tender
coins or banknotes that must be accepted if offered in payment of a debt
means of exchange
to allow people to make payments
money
anything widely accepted as a means of making payments
payment mechanism
a means of transferring money from one account to another e.g debit card, cheque
Portable
to be small enough and light enough to carry around easily
purchasing power
the quantity of goods or services that money can buy
rate of exchange
how much one item is worth in terms of a different item e.g. one British pound is worth 1.5 euros
recognisable
to be easily identified as genuine money
representational value
the value that an item represents rather than the value that it basin itself e.g. a banknote is just a piece of paper but it represents the value that is printed on it
scarce but sufficient
to be available in sufficient quantities to meet peoples needs but not in such quantities that the value of money falls.
store of value
an attribute of money that allows people to store money now and spend it later
transaction
buying of selling something
unit of account
to allow people to compare prices and to measure the value of money in the bank account.
