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Economics IGCSEPDF 51
118 pagesrevision 46932
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Rehaan Khan - Section
● Money: Any item or verifiable record
that is generally accepted as
payment for goods and services and
repayment of debts in a particular
country or socio-economic context.
Barter: The direct exchange of
goods and services for other goods
and services without using money.
●
● Functions of Money: The four key
roles money plays in an economy: a
medium of exchange, a measure of
value, a store of value, and a standard
for deferred payment. ● Commercial
Bank: A financial
institution that provides services
such as accepting deposits, making
business loans, and offering basic
investment products to the general
public and companies.
Central Bank: The institution
responsible for managing a nation's
currency, money supply, and interest
rates. It oversees the commercial
banking system.
●
This section covers the nature of money, its functions, and the roles of central banks,
commercial banks, and the stock exchange in an economy.
● Stock Exchange: A marketplace
where securities (like company
stocks and shares) are bought and
sold.
Before money, economies relied on
.
This system was inefficient because it
required a
–
you had to find someone who had what you
wanted and also wanted what you had.
Money was developed to solve this
problem. To be effective, money must have
these characteristics:
● Acceptability: Everyone must be
willing to accept it as payment.
● Durability: It must be able to
withstand being used repeatedly.
● Portability: It must be easy to carry
around.
3-4
The Evolution and Functions of Money
barter
double coincidence of wants
3.1 Money and Banking
Definitions
Notes