The development of money solved many of the problems inherent in the barter system. Explain TWO specific functions of money and state how each resolves a major disadvantage of barter.

Core Logic

(a) E-commerce (electronic commerce) is defined as the buying and selling of products and services through an electronic medium, primarily the internet. (b) M-money (mobile wallet) is a software application running on a mobile device (like a smartphone or tablet) that allows users to digitally store, send, and receive funds without needing physical cash or plastic cards. It expands e-commerce by allowing consumers to execute immediate electronic payments directly from their phones anywhere at any time, streamlining the checkout process for online retailers (e-tailers).

Evaluation Rubric / Model Answer

Marks awarded for:

• E-commerce: Buying/selling via electronic mediums/internet.
• M-money operation: A smartphone app used to store and transfer digital money securely.
• Expansion: Facilitates rapid, immediate online payments for goods without requiring standard banking infrastructure or cards.

Chapter Mix

Class 10 Business: Background To Business

Core Logic

Telegraphic money transfers (e.g., Western Union) allow rapid cross-border funds transmission using Electronic Funds Transfer networks.

• The sender (parents) visits a transfer office, pays the cash sum along with a service fee, and completes a details form specifying the recipient and destination.
• The transmitting office electronically sends the funds, converting the currency to the destination country's currency.
• The recipient (student) visits the destination office and must present appropriate proof of identity (and occasionally a password).
• Once verified, the agent disburses the money in local currency to the student.

Evaluation Rubric / Model Answer

Marks awarded sequentially for the process:

• Sender provides funds, recipient details, and pays a fee at the home office.
• Funds are electronically transmitted and converted to the destination currency.
• Recipient provides ID/password at the destination office.
• Funds are disbursed as cash (or equivalent) quickly to the recipient.

Chapter Mix

Class 10 Business: Background To Business

Core Logic

(a) The most efficient method is a Direct Deposit (via Electronic Funds Transfer)[cite: 18]. (b) Paying 200 employees via direct deposit provides massive administrative and security benefits. Firstly, it saves the employer significant administrative time; they do not have to manually count out physical cash envelopes or handwrite 200 individual cheques[cite: 18]. Secondly, it provides high security for the firm; the employer does not need to store, transport, or guard large, vulnerable sums of cash on the factory premises every payday[cite: 18].

Evaluation Rubric / Model Answer

Award marks for:

• Identification: Direct deposits / EFT[cite: 18].
• Advantage 1: Saves administrative time (no cash counting or cheque writing)[cite: 18].
• Advantage 2: Increased security (eliminates the risk of holding large cash payrolls on site)[cite: 18].

Chapter Mix

Class 10 Business: Background To Business

Core Logic

In international trade, exporters want payment before shipping, while importers are reluctant to pay before receiving the goods. Documentary credit resolves this impasse. The importer arranges for their bank to provide a guarantee (a letter of credit). This guarantees that the exporter will receive the payment as soon as they hand over the required documents of title (shipping documents proving the goods have been dispatched). Therefore, the exporter is safeguarded because the bank guarantees payment before ownership is formally released. The importer is safeguarded because payment is only released to the exporter once verified proof of shipping (documents) is presented.

Evaluation Rubric / Model Answer

Award marks for detailing the dual protection:

• Mechanism: Importer's bank guarantees payment upon presentation of shipping documents.
• Exporter benefit: Guaranteed payment prior to releasing ownership documents.
• Importer benefit: Funds are not released until proof of dispatch/shipping is legally verified.

Chapter Mix

Class 10 Business: Background To Business