All LIBF CEFS Unit 1 and Unit 2 || Answers 100% Rated Correct.
Acceptable correct answers One of the key features of money - to be widely accepted.
Barter correct answers To exchange goods and services for other goods and services without
using money.
Current account correct answers Bank or building society accounts where people can store their
money in the form of electronic balances and withdraw it to make payments.
Denomination correct answers A group of coins or notes that share the same face value.
Divisible correct answers A key feature of money - to be easily divided into amounts of different
value.
Double coincidence of wants correct answers A situation in which two people have goods or
services to trade and each wants what the other person can provide.
Durable correct answers 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). correct answers
Fiduciary value correct answers Value based on trust in the banking system.
Homogeneous correct answers A key feature of money - to look and feel the same as other coins
and notes of the same denomination.
Inflation correct answers A rise in prices, which means that the purchasing power of money falls.
,Intrinsic value correct answers 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 correct answers Coins or banknotes that must be accepted if offered in payment of a
debt.
Means of exchange correct answers A function of money - to allow people to make payments.
Money correct answers Anything widely accepted as a means of making payments.
Payment mechanism correct answers A means of transferring money from one account to another
eg debit card, cheque.
Portable correct answers A key feature of money - to be small and light enough to carry around
easily.
Purchasing power correct answers The quantity of goods or services that money can buy.
Rate of exchange correct answers 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 correct answers A key feature of money - to be easily identified as genuine money.
Representational value correct answers 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 correct answers 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 correct answers An attribute of money that allows people to store money now and
spend it later.
Transaction correct answers Buying or selling something.
Unit of account correct answers A function of money - to allow people to compare prices and to
measure the value of money in a bank account, etc
Aspirations correct answers 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 correct answers 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 correct answers 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 correct answers 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 correct answers A period when the country is producing and selling an
increasing amount of goods and services.
Interest rate correct answers The amount, expressed as percentage, that a financial services
provider charges a borrower when it lends money, or pays to a saver.
, Investments correct answers 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 correct answers A type of insurance policy that pays out a sum of money if the
insured person dies.
Life cycle correct answers 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 correct answers The number of years that people are expected, on average, to
live, based on the year in which they are born.
Mortgage correct answers A loan taken out to pay for a property, usually over a long term such as
25 years.
National Insurance contributions correct answers 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 correct answers Things that people need to survive, such as food, basic clothing and a
place to live.
Office for National Statistics correct answers 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 correct answers 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.
Acceptable correct answers One of the key features of money - to be widely accepted.
Barter correct answers To exchange goods and services for other goods and services without
using money.
Current account correct answers Bank or building society accounts where people can store their
money in the form of electronic balances and withdraw it to make payments.
Denomination correct answers A group of coins or notes that share the same face value.
Divisible correct answers A key feature of money - to be easily divided into amounts of different
value.
Double coincidence of wants correct answers A situation in which two people have goods or
services to trade and each wants what the other person can provide.
Durable correct answers 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). correct answers
Fiduciary value correct answers Value based on trust in the banking system.
Homogeneous correct answers A key feature of money - to look and feel the same as other coins
and notes of the same denomination.
Inflation correct answers A rise in prices, which means that the purchasing power of money falls.
,Intrinsic value correct answers 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 correct answers Coins or banknotes that must be accepted if offered in payment of a
debt.
Means of exchange correct answers A function of money - to allow people to make payments.
Money correct answers Anything widely accepted as a means of making payments.
Payment mechanism correct answers A means of transferring money from one account to another
eg debit card, cheque.
Portable correct answers A key feature of money - to be small and light enough to carry around
easily.
Purchasing power correct answers The quantity of goods or services that money can buy.
Rate of exchange correct answers 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 correct answers A key feature of money - to be easily identified as genuine money.
Representational value correct answers 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 correct answers 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 correct answers An attribute of money that allows people to store money now and
spend it later.
Transaction correct answers Buying or selling something.
Unit of account correct answers A function of money - to allow people to compare prices and to
measure the value of money in a bank account, etc
Aspirations correct answers 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 correct answers 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 correct answers 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 correct answers 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 correct answers A period when the country is producing and selling an
increasing amount of goods and services.
Interest rate correct answers The amount, expressed as percentage, that a financial services
provider charges a borrower when it lends money, or pays to a saver.
, Investments correct answers 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 correct answers A type of insurance policy that pays out a sum of money if the
insured person dies.
Life cycle correct answers 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 correct answers The number of years that people are expected, on average, to
live, based on the year in which they are born.
Mortgage correct answers A loan taken out to pay for a property, usually over a long term such as
25 years.
National Insurance contributions correct answers 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 correct answers Things that people need to survive, such as food, basic clothing and a
place to live.
Office for National Statistics correct answers 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 correct answers 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.
