Function of Money Flashcards
What does Unit of Account do?
It allows us to place a monetary value on goods and services.
The price of goods and services show the unit of account, for example a chocolate bar is 60p or a new car is £30,000.
What does Means of Exchange do?
It allows us to trade.
Businesses and customers can buy and sell goods and services using money, for example when you purchased your lunch yesterday or paid to go to the cinema.
What does Store of Value do?
It allows us to use it in the future as it keeps its value.
You might have money saved in a bank account or ‘piggy bank’ which you can then use to buy goods and services in the future.
What does Legal Tender do?
It is a legaly recognised form of payment.
Money is widely recognised and used for all sorts of transactions from buying an ice cream or getting a haircut to paying a deposit on a house and receiving your wages.
