unit 3 key topic 1 key terms Flashcards
money
flows in two directions - comes from various sources
function of money
the job money performs
store of value
allows us to keep it in the future as it holds its value
unit of account
allows us to place a monetary value on goods and services
means of exchange
allows us to trade - buy and sell goods and services through money
legal tender
legally recognised form of payment
factors influencing views on money
different people have different attitudes towards money- attitude may depend on individuals situation
personal attitudes
varied attitudes in risk and reward, and saving and borrowing
external influences
factors outside of control - state of the economy e.g. will impact wages, availability of jobs and price of goods and services
culture
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
interest rates
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
life events
life events (in or out of your control) will affect view on money e.g. travelling, illness, university, marriage
life stages
as you go through different stages in life, attitude to money will change
bankrupt
when an individual or organisation legally states its inability to repay debts
credit rating
a score given to individuals on how likely they are to repay debts based off previous actions
