Characteristics of Money
The item is valued because it is in relatively scarce supply
What is scarcity
Written instruction to a bank to make payment on behalf of an account holder.
What is a cheque
Production is mainly for the individual's own consumption rather than for sale.
What is a traditional/subsistence economy
You get rid of what you don't need in the bartering system
True or False
True
The item is easy to carry around
What is portability
This is used to make credit payments - the user is effectively borrowing money (from a finance house, which a bank usually owns) to make a payment, and it allows them a specific time frame each month in which to repay outstanding balances.
What is a credit card
This consists of items that had value in themselves and were also accepted in exchange. i.e. salt, cattle, beads.
What is commodity money?
An advantage of bartering is being able to trade without money
True or False
True
The item is hard wearing and long lasting
What is durability
The fastest way of transferring money, usually from an account in one country to an account in another country (sometimes referred to as a wire transfer)
What is a Telegraphic money transfer
Its value comes from the confidence people place in it and its acceptance as legal tender, rather than from the material used to make it.
What is paper money?
Bartering allows for wealth to be stored over time.
True or False
False
The item consists of units so large sums can be broken down.
What is divisibility
This is a payment where the details of the card are "read" by a card machine, and funds are transferred directly and immediately from the user's account to the person/account they are paying.
What is a Debit Card
What is the Modern Money Economy?
Commodity Money replaced bartering because....
The item is taken as payment
A cheque made out by a bank on behalf of a customer, to allow the customer to make a substantial payment, for example, when buying a house or a car.
What is a bank draft
The direct exchange of one good or service for another good or service without using money.
What is the Barter System?
This occurs when two people want the same thing at the same time.
What is Double Coincidence of Wants