T4.1.1 The functions and uses of money Quiz: KS3 Citizenship, Unit 4

The 20 questions

1. Which of these is a function of money?

   • A type of contract used only by the courts to settle disputes
   • A method of storing food for the winter months when crops are scarce
   • A way to measure the height of buildings and the size of plots of land
   • A medium of exchange that makes buying and selling easier

2. What problem does money solve compared with barter?

   • It means people no longer need to work for a living in the community
   • It makes goods heavier to carry, so people must use carts instead of bags
   • It removes the need for both sides of a trade to want what the other has
   • It stops prices from ever changing, so that shops can plan their stock

3. What is meant by money acting as a 'store of value'?

   • It can be saved and used later without losing much of its worth
   • It is worth more the longer it sits in a drawer at home
   • It can only be spent on the day it is earned, and no later
   • It is always kept in a bank vault, where it is protected from theft

4. Which of these is a unit of account?

   • Pounds sterling, used to price goods and record prices
   • A credit card used only to borrow money from the bank each month
   • A bag of rice used to pay for a haircut at the local barber
   • A bank account used to save gifts from relatives at birthdays

5. What is inflation?

   • A general rise in prices over time, which reduces what money can buy
   • A fall in the price of all goods across the economy for a sustained period
   • A government decision to print extra coins to pay for schools and hospitals
   • A type of interest paid on savings in a bank account each year

6. Which of these is a form of money in the UK?

   • Gift vouchers only
   • Passports
   • Share certificates
   • Banknotes and coins

7. Why do governments and banks try to keep inflation low and steady?

   • So that money loses all of its value over a short period of time
   • So that people can plan spending and saving with confidence
   • So that prices can change daily to match the cost of each item
   • So that people stop saving because money is no longer worth keeping

8. A shop sells a jumper for £30. Which function of money is shown by this price?

   • Store of value
   • Credit
   • Medium of exchange only
   • Unit of account

9. Why is a bank account useful for keeping money safe?

   • Banks sell savings to the government to pay for public services
   • Money is held securely and can be accessed when needed
   • Banks give cash to anyone who asks for it at the counter each day
   • Money in a bank account can never be lost, whatever happens to the bank

10. What is the difference between a debit card and a credit card?

    • A debit card spends money in your account; a credit card borrows money from the lender
    • Both cards can only be used abroad
    • Both cards borrow money from the government
    • A debit card borrows money; a credit card spends money in your account

11. What does 'cash flow' describe?

    • The number of banknotes printed by the Bank of England each year
    • The speed at which coins are made at the mint each year
    • The money coming into and going out of a person's or organisation's finances
    • The flow of water through a pipe in a household supply system

12. Which of these best describes a 'budget'?

    • A bill from a shop for goods that the customer has bought on credit
    • A loan from a friend that must be repaid with interest after one year
    • A plan for how money will be earned and spent over a period
    • A type of bank account that pays interest on savings each month

13. Why might a person need to keep a record of their spending?

    • To prove that they are a government minister responsible for the budget
    • To see where money goes and make better decisions about spending
    • To borrow more money from banks by showing a record of past spending
    • To avoid paying any tax on the money that they earn each year

14. Which of these is a 'need' rather than a 'want'?

    • A new games console
    • A designer watch
    • A film ticket
    • Food and shelter

15. What does 'value for money' mean?

    • Paying the highest price possible so that the seller is happy with the sale
    • Saving money by never buying anything, however useful it might be
    • Getting good quality and benefit for the price paid
    • Buying only goods from a single shop to keep track of all the spending

16. Why do people compare prices before buying something?

    • To avoid paying any tax
    • To make sure the seller is a government body
    • To increase the price they pay
    • To check they are getting good value for their money

17. Which of these is an example of a regular expense?

    • A one-off birthday present
    • Monthly rent or mortgage payment
    • An unexpected windfall
    • A gift from a relative

18. Which of these is an example of income?

    • Wages paid by an employer
    • A bill for electricity
    • A loan repayment
    • A parking fine

19. A person earns £1,000 a month and spends £1,150. What is the result?

    • A balanced budget
    • A surplus of £150 each month
    • A surplus of £1,150 each month
    • A deficit of £150 each month

20. Which of these is a source of money for the government?

    • Profits from schools that are run as businesses and sell their services
    • Fines paid to the monarch by people who break the law each year
    • Gifts from private donors who give money to fund the public services
    • Taxes such as income tax and VAT

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