What's covered
Key facts
Cash vs digital payment methods
Money sent between bank accounts electronically is called a bank transfer.
Currency and exchange rates
Travellers usually swap pounds for foreign cash at a bureau de change.
What money is and the forms it takes
Cryptocurrency is digital money held on a computer system.
Where money comes from
A government payment to support people unable to work is called a benefit.
Why money exists - the functions of money
A problem with bartering is that both people must want what the other offers (the "double coincidence of wants").
Cash vs digital payment methods
A disadvantage of cash for large purchases is that it can be lost or stolen easily.
Currency and exchange rates
The euro is used as legal tender in France, Germany and other Eurozone members.
What money is and the forms it takes
A bank-account balance is an example of digital money.
Where money comes from
The Bank of England issues new banknotes for England and Wales.
Why money exists - the functions of money
High inflation reduces money's effectiveness as a store of value.
Practice questions with answers
A taste of the 44 questions in this topic, answers marked. Sign up to practise the full set with spaced repetition.
Which is a digital payment method?
- •Counting out loose change
- •Handing over four £1 coins
- •Paying with a £5 note
- ✓Tapping a contactless debit card
What is an 'exchange rate'?
- •The annual tax on currency transactions
- •The fee a shop charges for change
- •The number of coins inside one note
- ✓The price of one currency in terms of another
Which is an example of digital money used today?
- •A bag of mixed gold coins
- ✓A balance held in a bank account
- •A box of paper £20 notes
- •A jar of saved coppers
Which UK institution issues new banknotes for England and Wales?
- ✓Bank of England
- •Financial Conduct Authority
- •HM Treasury
- •Royal Mint
Which is one main function of money?
- •A guarantee of rising wages
- ✓A medium of exchange between people
- •A promise that prices never rise
- •A way to avoid paying tax
What is one advantage of using contactless card payments?
- •Always free of any small charge
- ✓Fast checkouts with no PIN needed
- •It works with no bank account
- •No record of the purchase ever kept
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