LIBF Unit 1 topics 1-6

Acceptable - Answer- One of the key features of money - to be widely accepted. Barter - Answer- To exchange goods and services for other goods and services without using money. Current account - Answer- Bank or building society accounts where people can store their money in the form of electronic balances and withdraw it to make payments. Denomination - Answer- A group of coins or notes that share the same face value. Divisible - Answer- A key feature of money - to be easily divided into amounts of different value. Double coincidence of wants - Answer- A situation in which two people have goods or services to trade and each wants what the other person can provide. Durable - Answer- 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). - Answer- Fiduciary value - Answer- Value based on trust in the banking system. Homogeneous - Answer- A key feature of money - to look and feel the same as other coins and notes of the same denomination. Inflation - Answer- A rise in prices, which means that the purchasing power of money falls. Intrinsic value - Answer- 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 - Answer- Coins or banknotes that must be accepted if offered in payment of a debt. Means of exchange - Answer- A function of money - to allow people to make payments. Money - Answer- Anything widely accepted as a means of making payments. Pay