LIBF Unit 1 topics 1, 2, 3, 4, 5 & 6. Full exam review. Rated A+

LIBF Unit 1 topics 1, 2, 3, 4, 5 & 6. Full exam review. Rated A+ 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 Aspirations - -Things or experiences that people would like to have in the future, for example owning a home instead of renting, having a luxury holiday or buying a sports car. Assets - -Things that a person or a business owns. For a person their assets might include property, jewellery or financial products such as company shares. Bank rate - -The interest rate that the Bank of England uses when it lends money to other banks. Financial services providers take account of the Bank rate when they decide how to set interest rates on their own products. Demographic changes - -Changes to the size and structure of the population (for example an increase in the number of people over the age of 65, or a rise in children of school age). Economic boom - -A period when the country is producing and selling an increasing amount of goods and services. Interest rate - -The amount, expressed as percentage, that a financial services provider charges a borrower when it lends money, or pays to a saver. Investments - -Money paid into financial products; the aim is that the value of the product will grow over time and so the person will eventually receive back more money than they paid in. Investments are a way of saving over the medium or long term. Life assurance - -A type of insurance policy that pays out a sum of money if the insured person dies. Life cycle - -The stages through which people pass between birth and death, including childhood, teenage years, young adult, mature adult and old age. Not everyone passes through all stages (for instance they might die at an early stage) and not everyone passes through the stages at the same age. Life expectancy - -The number of years that people are expected, on average, to live, based on the year in which they are born. Mortgage - -A loan taken out to pay for a property, usually over a long term such as 25 years. National Insurance contributions - -Money deducted from the pay of people who are employed or self employed and used by the government to fund state pensions and other benefits. Needs - -Things that people need to survive, such as food, basic clothing and a place to live. Office for National Statistics - -The independent organisation that produces statistics on many aspects of life in the UK such as employment, health, how long people live for in different areas of the country, housing, etc. Pension - -An income that people receive after retiring from work. In the UK people receive a pension from the state; some people also receive pension payments from schemes run by their former employers or arrangements that they have made for themselves. Recession - -A period of at least six months when the amount of goods and services the country is producing is shrinking. Redundancy - -Losing a job because the business no longer needs, wants or can afford that job to be done; it is related to the needs of the business and not to how well or badly an individual does their job. Risk averse - -Reluctant to take any kind of risk. Risk tolerant - -Willing to take risks. Shares - -Investments that represent part-ownership of a company. Wants - -Things that people would like to have but can survive without, such as entertainment, fashionable clothes, etc. Will - -A legal document setting out what a person wants to happen to their belongings (assets) after their death. ATM - -Automated teller machine, also known as a cash machine. Bacs - -The central payment system used to process different types of electronic payment. Banker's draft - -A banker's draft is similar to a cheque but the payment is signed and guaranteed by the financial services provider that issues it, rather than by an individual. Banker's drafts are used for paying large sums of money. Cashback - -A service offered by some retailers when customers