Business 2 Flashcards
(15 cards)
What is barter trade?
Barter trade is the act of exchanging items without the use of money
What are the three problems with bartering?
- Divisibility
- Coincidence of wants
- Portability
Where were cowrie shells used?
They were used in regions like Africa, India, China and the Pacific Islands
What is money?
Money is a commodity that can be used as a medium of exchange.
What are the four key functions of money?
- Medium of exchange
- Good store of value
- Measure of value
- Means of deffered payment
What is intrinsic value?
The “real” value of an item based on what it’s made of/ can do directly
What is extrinsic value?
The value people give to an item based on external factors
e.g supply and demand, popularity, status etc
What are the services banks offer?
a) Deposit taking or saving
b) Facilitating payments or transfer of money
c) Lending or offering a loan
d)Providing other services like credit cards or exchanging currency
What are the three types of bank accounts?
- Savings account
- Fixed Deposit account
- Current account
What is a savings account?
A savings account is an account that accrues little interest and can be withdrawn at any time.
What is a fixed deposit account?
A F.D account is an account where you put money for a set amount of time and gain high interest after the period is up.
What is a current account?
A current account is an account that acrues no interest but can take more money than they have.
Who usually uses a current account?
Businesses
What are the differences between a current and savings account?
- A current account can overdraw more money than they have
- Cheque books are available for current account holders
What is legal tender?
Legal tender is the official currency of a country
