Unit 1 topic 1

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  • Created by: ruyb
  • Created on: 05-03-18 10:17
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  • Unit 1 topic 1
    • features of money
      • acceptable
        • people accept it as payemnt
      • divisable
        • divided into smaller amounts
      • durable
        • lasts long enough
      • homogeneous
        • alll looks the same
      • recognisable
        • other people know its value
      • portable
        • can be moved easily
      • scarce but sufficient
        • just enough
    • functions of money
      • means of exchange
      • store of value
      • unit of account
      • a means of deferred payment
    • legal tender
      • Coins or banknotes that must be accepted if offered in payment of a debt.
    • development of money
      • fiduciary value
        • Value based on trust in the banking system.
      • representatioal value
        • The value that an item represents rather than the value it has in itself:
          • banks notes and coins
      • intrinsic value
        • The value that an item has in itself,
          • rice , beans, gold
    • Things to consider
      • a double coincidence of wants
        • a situation where two people have goods and services that the other requires
      • rate of exchange
        • How much one item is worth in terms of another
          • Eg a bag of flour is worth 2 bags of rice
          • E.g one british pound is worth 1.5 euros
    • Inflation
      • a rise in prices meaning the purchasing power of money falls


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