Functions of Money and role of money -unit 3 lesson 1

What are the four main functions of money?

Means of Exchange, Store of Value, Legal Tender, Unit of Account.

What does the function 'Means of Exchange' refer to?

It refers to money being used to buy goods and services.

What is meant by 'Store of Value' in the context of money?

It means that money keeps its worth over time.

Define 'Legal Tender'.

It is an officially recognized way to pay debts.

What does 'Unit of Account' measure?

It measures value, such as £1 equating to 1 unit.

How do personal attitudes affect financial behavior?

Cautious vs risk-taking approaches influence spending, borrowing, and saving.

What financial situations are typical during Childhood?

Relies on others, with no personal income.

What financial factors are typical during Young Adulthood?

Involves student loans, rent, and the need to save.

How might culture influence money usage?

Religious beliefs, cultural norms, and ethical views may affect spending and saving habits.

What life events can impact financial priorities?

Events such as redundancy, inheritance, illness, or starting a family can change financial situations.

What influence do interest rates have on financial behavior?

High interest rates encourage saving, while low interest rates make borrowing cheaper.