Money and Banking

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Junior Cert. Business Studies - Money and Banking Chapter

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Money and Banking

  1. 1.  Money History of Money Bartering Definition of Money
  2. 2.  How did people pay for goods before we had “money” as we know it today? A system known as bartering
  3. 3. Today, bartering no longer exists,except perhaps between friends.E.G. _____________
  4. 4.  In order to barter, each person had to have goods or services that the other person wanted Both items had to be of equal value The goods being exchanged had to be carried around- very awkward if the goods were heavy or bulky
  5. 5.  Money is anything of value that is widely accepted as payment for goods and services
  6. 6.  Medium of exchange Measurement of value Standard of deferred payments Store of value
  7. 7.  On 1st January 2002, Ireland along with 11 other members joined the Euro The EMU was formed (Economic and Monetary Union) There are 17 countries now in the Euro zone Can you name a country other than Ireland that uses the Euro?
  8. 8. Eurozone Countries
  9. 9.  No exchange rate issues No currency exchange fees Ireland’s interest rate should stay relatively low Ireland’s inflation rate should also stay low
  10. 10. 9
  11. 11. Cheque:A written instruction to your bank to pay a sumof money to another person. 9
  12. 12. Cheque: (continued)There are three parties to a cheque: ◦ drawer — the account holder ◦ drawee — the bank where the account is held ◦ payee — the person being paid the money 9
  13. 13.  A cheque contains the following additional information:1. Date 2. Amount in words 3. Amount in figures4. Drawer’s signature 5. Cheque number 6. Account number7. Branch sort code 8. Purpose of payment 9. New balance in account 1 18 2 39 4 5 5 7 6 9
  14. 14. Crossing a chequeCrossing a cheque involves drawing twoparallel lines across the front 9
  15. 15. Plastic Cards:Banks provide a number of “plastic” cards fortheir current account holders: ◦ Laser (Debit) Card ◦ ATM Card ◦ Cheque Guarantee Card ◦ Credit CardPeople use “plastic” to pay for goods andservices and to transfer money to other peoplewithout using cash. 9
  16. 16.  Money can be transferred electronically in the following ways:  Direct Debit A direct debit can be used to make a regular payment where the amount changes each time, e.g. the electricity bill  Standing Order A standing order can be used to make a regular payment where the amount is the same each time, e.g. a regular donation to charity 9
  17. 17.  Money can be transferred electronically in the following ways:  Bank Giro Credit Transfer A bank giro credit transfer is used to make a single payment to another person through the bank, e.g. paying your TV licence  Paypath Paypath is used by employers to transfer the wages of their employees directly into their bank accounts each payday 9

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