Unit 1 Topic 1 Flashcards
Define what it means to ‘barter’
To exchange goods and services for other goods and services without using money.
What are current accounts?
Bank or building society accounts where people can store their money in the form of electronic balances and withdraw it to make payments.
Define ‘denomination’
A group of coins or notes that share the same face value.
Explain ‘double coincidence of wants’
A situation in which two people have goods or services to trade and each wants what the other one can provide.
Define ‘face value’
The value marked on a coin or note (eg 1p, 2p, 5p, £5, £10).
Define ‘fiduciary value’
Value based on trust in the banking system.
Define the term ‘homogeneous’
A key feature of money - to look and feel the same as other coins and notes of the same denomination.
Define the term ‘acceptable’
One of the key features of money - to be widely accepted.
Define the term ‘divisible’
A key feature of money - to be easily divided into amounts of different value.
Define the term ‘durable’
A key feature of money - to be strong enough to be reused in many transactions.
What is meant by inflation?
A rise in prices, leading to the purchasing power of money falling.
Define ‘intrinsic value’
The value that an item has in itself (eg a banknote does not have intrinsic value because it is a piece of paper or polymer).
Define ‘legal tender’
Coins or banknotes that must be accepted if offered in payment of a debt.
Define the term ‘means of exchange’
A function of money - to allow people to make payments.
Define ‘money’
Anything widely accepted as a means of making payment.
Define the term ‘payment mechanism’
A means of transferring money from one account to another (eg debit card, cheque)
Define the term ‘portable’
A key feature of money - to be small and light enough to carry around easily.
