All LIBF CEFS Unit 1 and Unit 2 Exam Questions and Answers Acceptable - Correct Answers ✅One of the key features of money - to be widely accepted.Barter - Correct Answers ✅To exchange goods and services for other goods and services without using money.Current account - Correct Answers ✅Bank or building society accounts where people can store their money in the form of electronic balances and withdraw it to make payments.Denomination - Correct Answers ✅A group of coins or notes that share the same face value.Divisible - Correct Answers ✅A key feature of money - to be easily divided into amounts of different value.Double coincidence of wants - Correct Answers ✅A situation in which two people have goods or services to trade and each wants what the other person can provide.Durable - Correct Answers ✅A key feature of money - to be strong enough to be reused in many transactions.Face value The value marked on a coin or note (eg 1p, 2p, 5p, £5, £10). - Correct Answers ✅ 1 / 4
All LIBF CEFS Unit 1 and Unit 2 Exam Questions and Answers Fiduciary value - Correct Answers ✅Value based on trust in the banking system.Homogeneous - Correct Answers ✅A key feature of money
- to look and feel the same as other coins and notes of the
same denomination.Inflation - Correct Answers ✅A rise in prices, which means that the purchasing power of money falls.Intrinsic value - Correct Answers ✅The value that an item has in itself, eg a bag of rice has intrinsic value because it is a staple food; a solid gold coin has intrinsic value because it is made of a precious metal; a banknote does not have intrinsic value because it is a piece of paper.Legal tender - Correct Answers ✅Coins or banknotes that must be accepted if offered in payment of a debt.Means of exchange - Correct Answers ✅A function of money - to allow people to make payments.Money - Correct Answers ✅Anything widely accepted as a means of making payments. 2 / 4
All LIBF CEFS Unit 1 and Unit 2 Exam Questions and Answers Payment mechanism - Correct Answers ✅A means of transferring money from one account to another eg debit card, cheque.Portable - Correct Answers ✅A key feature of money - to be small and light enough to carry around easily.Purchasing power - Correct Answers ✅The quantity of goods or services that money can buy.Rate of exchange - Correct Answers ✅How much one item is worth in terms of a different item, eg one bag of flour is worth four nails, one British pound is worth 1.5 euros, etc.Recognisable - Correct Answers ✅A key feature of money - to be easily identified as genuine money.Representational value - Correct Answers ✅The value that
an item represents rather than the value it has in itself: a
banknote is just a piece of paper but it represents the value that is printed on it.Scarce but sufficient - Correct Answers ✅A key feature of money - to be available in sufficient quantities to meet people's needs but not in such quantities that the value of money falls. 3 / 4
All LIBF CEFS Unit 1 and Unit 2 Exam Questions and Answers Store of value - Correct Answers ✅An attribute of money that allows people to store money now and spend it later.Transaction - Correct Answers ✅Buying or selling something.Unit of account - Correct Answers ✅A function of money - to allow people to compare prices and to measure the value of money in a bank account, etc Aspirations - Correct Answers ✅Things or experiences that people would like to have in the future, for example owning a home instead of renting, having a luxury holiday or buying a sports car.Assets - Correct Answers ✅Things that a person or a business owns. For a person their assets might include property, jewellery or financial products such as company shares.Bank rate - Correct Answers ✅The interest rate that the Bank of England uses when it lends money to other banks.Financial services providers take account of the Bank rate when they decide how to set interest rates on their own products.
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