A community theatre has saved £8,000 in a bank account to replace its stage lighting. The account earns no interest and the theatre will not add to the balance. Prices across the economy are rising quickly, and the expected cost of the replacement lighting is shown below.
| Year | Expected cost of replacement lighting |
|---|---|
| 1 | £8,000 |
| 3 | £9,200 |
Identify the function of money that is weakened while the theatre waits to buy the lighting. Using the data, explain what will happen to the theatre's ability to buy the lighting if it waits until Year 3, and suggest when it should buy the lighting.
60 exam-style questions on AQA GCSE Economics 2.5 The role of money and financial markets, covering 2.5.1a Functions of money, 2.5.1b Definition of money, 2.5.2a Agents in the financial sector, 2.5.2b The role of the Bank of England, and 2.5.2c The role of high street banks. Each one has a worked solution and a mark scheme showing where the marks go.