Topic 3 - Money

Question 1

History of money

Answer 1

Financial systems have a long history

Money too dates back to at least 650BC - different forms of payment and types of money have been used since that time

Question 2

Purpose of money

Answer 2

A medium of exchange in a commonly recognised form, which will be accepted for payment of goods and services
main purpose - to provide a means of exchange so that we can buy goods and services
Enable the people providing them to receive payment

Question 3

Features of money

Answer 3

In order for money to work properly, it has to have a number of distinctive features - make it possible and effective to use
mainly concern portability, durability and holding value
This used to be achieved in the form of cash, ie banknotes and coins

Question 4

Cashless Society

Answer 4

A social system in which no cash is used to pay for goods and services
The rise of technology has meant that we now pay for many things without cash, and electronic payments are becoming much more common
e.g. credit card - allows the owner to use credit
debit card - withdrawing money from your own account, from money that you already have; not using more money than you have
Oyster card - payment method for London public transport
Direct debit - an arrangement made with the bank to allow a company to take money directly from your bank account, in payment for goods or services; often used to pay bills

Question 5

Income

Answer 5

all of the money that you receive, including through work, investments and state benefits
- bulk of our money comes to us through our work
Wage - a sum of money paid for work carried out, usually paid weekly or monthly at an hourly or daily rate, or paid as a fixed, agreed amount per task completed
- state benefits (e.g. pensions)
- investments - something that you buy because it is likely to make you money in the future
- interest on savings
- gifts, pocket money, inheritances
- selling personal items