unit 3 key topic 1 key terms

Question 1

money

Answer 1

flows in two directions - comes from various sources

Question 2

function of money

Answer 2

the job money performs

Question 3

store of value

Answer 3

allows us to keep it in the future as it holds its value

Question 4

unit of account

Answer 4

allows us to place a monetary value on goods and services

Question 5

means of exchange

Answer 5

allows us to trade - buy and sell goods and services through money

Question 6

legal tender

Answer 6

legally recognised form of payment

Question 7

factors influencing views on money

Answer 7

different people have different attitudes towards money- attitude may depend on individuals situation

Question 8

personal attitudes

Answer 8

varied attitudes in risk and reward, and saving and borrowing

Question 9

external influences

Answer 9

factors outside of control - state of the economy e.g. will impact wages, availability of jobs and price of goods and services

Question 10

culture

Answer 10

tradition, religion and ethnic beliefs all impact view on money e.g. older Chinese people save and younger people are willing to spend more on credit

Question 11

interest rates

Answer 11

when interest rates are low people will be more likely to borrow or spend on credit - when interest rates are high people are more likely to save

Question 12

life events

Answer 12

life events (in or out of your control) will affect view on money e.g. travelling, illness, university, marriage

Question 13

life stages

Answer 13

as you go through different stages in life, attitude to money will change

Question 14

bankrupt

Answer 14

when an individual or organisation legally states its inability to repay debts

Question 15

credit rating

Answer 15

a score given to individuals on how likely they are to repay debts based off previous actions

Question 16

debt

Answer 16

money owed

Question 17

solvent

Answer 17

ability to meet day to day expenditure and repay debts

Question 18

income

Answer 18

money coming into a business

Question 19

repossession

Answer 19

when a property/asset is taken from a business

Question 20

expenditure

Answer 20

the money spent by a business or the amount of money a business needs to cover costs

Question 21

risk

Answer 21

anything that could impact personal or business finances

Question 22

adolescence

Answer 22

second stage in life stages where individuals want to be less reliant on parents and may find a part time job

Question 23

pension

Answer 23

long term saving plan - individuals contribute throughout working life

Question 24

mortgage

Answer 24

a long term loan to fund the purchase of assets e.g. a house, to be paid over a long period of time

Question 25

insurance

Answer 25

an agreement with a third party to provide compensation against financial loss

Question 26

inflation

Answer 26

a general increase in price and fall in value of money

Question 27

borrowing

Answer 27

to receive money in exchange of a promise to re pay the amount to the lender