Topic 1

Question 1

Acceptable

Answer 1

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

Question 2

Barter

Answer 2

To exchange goods and services with other goods and services without the use of money

Question 3

Current Account

Answer 3

an account where people can store there money in the form of electric balances and withdraw it to make money

Question 4

Denomination

Answer 4

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

Question 5

Divisible

Answer 5

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

Question 6

Double coincidence of wants

Answer 6

a situation in which two people have goods or services to trade and they both want what each other has

Question 7

Durable

Answer 7

to be strong enough to be reused in many transactions

Question 8

Face value

Answer 8

the value marked on a coin or note e.g. 1p, 2p, 5p, £5, £10

Question 9

Fiduciary value

Answer 9

value based on trust in the banking system

Question 10

Homogeneous

Answer 10

when all coins and notes look and feel the exact same

Question 11

Inflation

Answer 11

a rise in prices, which means that purchasing power of money falls

Question 12

Intrinsic value

Answer 12

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.

Question 13

Legal tender

Answer 13

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

Question 14

means of exchange

Answer 14

to allow people to make payments

Question 15

money

Answer 15

anything widely accepted as a means of making payments

Question 16

payment mechanism

Answer 16

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

Question 17

Portable

Answer 17

to be small enough and light enough to carry around easily

Question 18

purchasing power

Answer 18

the quantity of goods or services that money can buy

Question 19

rate of exchange

Answer 19

how much one item is worth in terms of a different item e.g. one British pound is worth 1.5 euros

Question 20

recognisable

Answer 20

to be easily identified as genuine money

Question 21

representational value

Answer 21

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

Question 22

scarce but sufficient

Answer 22

to be available in sufficient quantities to meet peoples needs but not in such quantities that the value of money falls.

Question 23

store of value

Answer 23

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

Question 24

transaction

Answer 24

buying of selling something

Question 25

unit of account

Answer 25

to allow people to compare prices and to measure the value of money in the bank account.