1.3 Functions money must perform Flashcards
1
Q
people use money to …?
A
measure value
make payments
save
borrow
2
Q
unit of account
A
- money offers a standard measure of value.
- see how values change overtime or between countries
3
Q
How a means of exchange works
A
people trust the banking system + legal tender
4
Q
a store of value
A
money is used to store financial value for future use
5
Q
borrowing
A
can borrow money to buy goods now that they cant afford out of current income (delaying payment)
6
Q
lender during borrowing term
A
cannot use the loan for any other purpose, compensate by paying interest
