CeFS  key terms Topic 1

Flashcards by palacey, updated more than 1 year ago
Created by palacey over 7 years ago


Flashcards on CeFS  key terms Topic 1, created by palacey on 11/12/2013.

Resource summary

Question Answer
Acceptable One of the key features of money - to be widely accepted
Barter To exchange goods and services for other goods and services without using money
Current Account Bank or building society accounts where people can store their money in the form of electronic balances and withdraw it to make payments
Denomination A group of coins or notes that share the same face value
Divisible A key feature of money - to be easily divided into amounts of different value
Double coincidence of wants A situation in which two people have goods or services to trade and each wants what the other person can provide
Durable A key feature of money - to be strong enough to be reused in many transactions
Face value The value marked on a coin or note (eg 1p, 2p, 5p, £5, £10)
Fiduciary value Value based on trust in the banking system
Homogeneous A key feature of money - to look and feel the same as other coins and notes of the same denomination
Inflation A rise in prices, which means that the purchasing power of money falls
Intrinsic value The value that an item has in itself, eg a bag of rice has intrinsic value because it is a staple food; a solid gold coin has intrinsic value because it is made of a precious metal; a banknote does not have intrinsic value because it is a piece of paper
Legal tender Coins or banknotes that must be accepted if offered in payment of a debt
Means of exchange A function of money - to allow people to make payments
Money Anything widely accepted as a means of making payments
Payment mechanism A means of transferring money from one account to another eg debit card, cheque
Portable A key feature of money - to be small and light enough to carry around easily
Purchasing power The quantity of goods or services that money can buy
Rate of exchange How much one item is worth in terms of a different item eg one bag of flour is worth four nails, one British pound is worth 1.5 euros, etc.
Recognisable A key feature of money - to be easily identified as genuine money
Representational value The value that an item represents rather than the value it has in itself: a banknote is just a piece of paper but it represents the value that is printed on it
Scarce but sufficient A key feature of money - to be available in sufficient quantities to meet people's needs but not in such quantities that the value of money falls
Store of value An attribute of money that allows people to store money now and spend it later
Transaction Buying or selling something
Unit of account A function of money - to allow people to compare prices and to measure the value of money in a bank account, etc.
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