Agored Cymru CeFS Level 3: Purposes and Features of Money

Vocabulary flashcards covering the four purposes of money, eight key features of money, and analytical frameworks from Agored Cymru CeFS Level 3 Unit 1 (Topics 1.1 and 1.2).

Means of Exchange

A purpose of money defined as being widely accepted as payment for goods and services, eliminating the need for a double coincidence of wants in barter.

Store of Value

A purpose of money where it keeps its purchasing power over time, allowing individuals to earn now and spend later.

Unit of Account

A purpose of money acting as a common measuring stick used to set prices and compare the value of different goods and services.

Standard of Deferred Payment

A purpose of money that enables value to be borrowed now and repaid later, with debts recorded and settled in the same units.

Barter

The direct swapping of goods and services without using money, which requires a double coincidence of wants between trading parties.

Purchasing Power

A measure of how much goods or services a single unit of money can actually buy.

Fiduciary Value

The trust-based worth of money (from Latin 'fides' meaning faith), where coins and notes have no value in themselves but represent value accepted by society.

Acceptable

A key feature of money where everyone trusts that it will be taken as payment, accepting it in return for goods or services.

Recognisable

A key feature of money where genuine currency is easy to tell apart from forgeries through visual, tactile, or electronic security features.

Stable

A key feature of money meaning it holds its value over time so that a given sum is worth a similar amount in the future.

Divisible

A key feature of money meaning it comes in multiple denominations so exact amounts can be paid and correct change given.

Durable

A key feature of money meaning it is hard-wearing and able to withstand repeated physical use across many transactions.

Portable

A key feature of money meaning it is lightweight and easy to carry around to spend.

Scarce but Sufficient

A key feature of money where supply is strictly controlled—enough for trade, but not so much that prices rise and value falls.

Homogeneous

A key feature of money meaning every unit of a given denomination looks, feels, and functions identically to every other unit of that same denomination.

I.E.E.C. Structure

An analytical framework standing for Identify, Evidence, Explain, and Consequence, used to justify which function of money is at work in a given scenario.

P E E L structure

A writing structure standing for Point, Evidence, Explain, and Link, used to construct 6-mark evaluation answers in financial studies.