Trade and Money

Question 1

What do we call the system of trade in which the value of something was determined in relation to another object.

Answer 1

bartering

Question 2

What is the double wants problem?

Answer 2

If you want to exchange wheat for goats, you have to find someone who has goats AND wants wheat.

Question 3

What important invention resulted from the double wants problem?

Answer 3

Money

Question 4

How does money solve the double wants problem.

Answer 4

It has a standardised value by convention, but no inherent value.

Question 5

What are the pros and cons of electronic banking>

Answer 5

Pros:
Quick - don’t need to go to bank
Convenient - any time, anywhere
Efficient - computers are faster than human tellers

Cons:
Security - someone can steal your password and take control of your money

Question 6

What are bank cards used for?

Answer 6

To make payments

To conduct transactions at ATM

Question 7

What are the characteristics of money that bank cards have?

Answer 7

Scarce - can’t be copied
Durable - don’t fall apart
Portable - easy to carry around
Divisible - can pay any price

Question 8

What information is shown on a bank card?

Answer 8

Name of the issuing bank
Card holder name and signature
Unique card number
Expiry date
Security feature (magnetic strip or chip) to prevent duplication

Question 9

Traditional societies lived on what they produced and did not need to trade. What word do we use to describe this?

Answer 9

self-sufficient

Question 10

Give examples of self-sufficient societies.

Answer 10

hunter-gatherers (San) in South Africa
Twa in Congo
Inuit in Alaska
Aborigines in Australia

Question 11

How did/do self-sufficient societies survive?

Answer 11

Hunting and gathering - wild animals and food from plants

Question 12

How did self-sufficient societies get the goods and services they needed?

Answer 12

The produced them themselves

Question 13

What is the name for the economy of a self-sufficient society?

Answer 13

A subsistence economy

Question 14

What were the disadvantages of bartering?

Answer 14

Not always practical
Difficult to find what you wanted or needed
Goods were difficult to carry or transport
No common measure of value
Certain goods could not be divided into smaller units
No late payments
Storing goods is difficult
Difficult to know the real value of items

Question 15

What was the first form of money? Where and when?

Answer 15

Cowry shells. China 1200 BC

Question 16

Where and when were the earliest coins used? What form did they take?

Answer 16

Lydia (in Turkey) in 500 BC. Pieces of silver

Question 17

Where and when were the earliest banknotes used? What were they made of?

Answer 17

China 118 BC. :Leather

Question 18

What do we call a modern society that uses technology to produce goods for trade?

Answer 18

Industrialised society

Question 19

What do modern societies us to pay for goods and services?

Answer 19

Coins, bank notes
Debit and credit cards
Electronic/Internet banking

Question 20

How do people with specialised skills provide for their needs?

Answer 20

They earn money which they use to buy goods and services produced by other people.

Question 21

What did we call hunters who started to tame and keep animals?

Answer 21

Herders

Question 22

When did bartering start?

Answer 22

9000 BC

Question 23

What allowed people to specialise in the production of specific goods and services?

Answer 23

Trade. They could barter their speciality products and services for other things.

Question 24

What did herders prefer to use their livestock for?

Answer 24

Milk rather than meat.

Question 25

What is a promissory note?

Answer 25

A written and signed promise to pay a sum of money.

Question 26

What do we call the person to whom the money is promised in a promissory note?

Answer 26

Payee

Question 27

What pieces of information are shown on a promissory note?

Answer 27

``` The words "Promissory Note" Amount that the note is worth Interest that will be added When the payment is to be made Place where the payment is to be made Name of the payee Name of the payer Payer's signature Terms of repayment Date until when the note is valid ```

Question 28

What are the advantages and disadvantages of using the Internet for buying and banking?

Answer 28

Advantages: Available 24 hours a day Consumers and producers need not be in the same place More choice in products and services Saves on travelling and time Faster communication and access to information Disadvantages: More information required by online store (fill in forms) Personal information not always safe. Potential for fraud. Cannot check the quality before you buy No personalised customer service Difficult to return faulty goods

Question 29

What are the security features on a South African banknote?

Answer 29

Watermark within the paper Security thread running through the paper High quality paper Print quality

Question 30

When people started trading goods for money, they gathered in certain areas to make it easier for buyers and sellers to meet. What do we call this process?

Answer 30

Urbanisation

Question 31

What are the uses of money?

Answer 31

medium of exchange unit of account - standard measure of what things are worth store of value - holds its value over time

Question 32

What is a consumer economy?

Answer 32

An economy where businesses encourage consumers to spend as much money as possible on their goods and services.

Question 33

What are sustainable resources?

Answer 33

Resources that can be re-generated

Question 34

What are the four characteristics of money?

Answer 34

Scarce Durable Portable Divisible into smaller parts

Question 35

What is a surplus?

Answer 35

More of something than is needed

Question 36

Why is a surplus important for trade?

Answer 36

People could specialise in the production of one item, producing a surplus of that item, which they could then trade for other goods.

Question 37

What were the results of specialisation?

Answer 37

More goods are produced | A greater variety of goods is produced

Question 38

What is a market?

Answer 38

A place where people come together to buy and sell goods

Question 39

What is indirect trade?

Answer 39

Individuals accept money for the products they have produced and then use the money to buy other goods and services.

Question 40

What is money?

Answer 40

An object that can be exchanged for goods and services (but has very little inherent value)

Question 41

What is a medium of exchange?

Answer 41

An item that is used to make trade easier. E.g. notes and coins

Question 42

What does durable mean?

Answer 42

lasts for a long time and is not easily broken or used up

Question 43

What is a cheque?

Answer 43

a written instruction to a bank ordering them to pay a certain sum of money to the person named on the cheque

Question 44

What is a credit card?

Answer 44

A type of bank card that allows the holder to borrow money to make payments.

Question 45

What is a debit card?

Answer 45

A type of bank card that allows the holder to make payments from money that they have deposited in the bank