3.2.5 Flashcards
What are 3 advantages to retail banks?
They are convenient-online or high street, they offer advice on what to do with money and offer a wide range of services.
What are 3 disadvantages to retail banks?
Conflict of interest between shareholders and consumers, interest charged on loans and overdrafts and high charges if you default on an overpayment.
What is a deferred payment?
An agreement between a lender and a borrower allowing the borrower to pay for goods immediately and make payments in the future.
What is a medium of exchange?
Usually money issued to exchange goods or services.
What is money?
The legal tender of the country, usually issued by the bank typically consisting of notes and coins.
What is a store of value?
The function of the asset that can be stored, retrieved and exchanged at a later time.
What is a unit of account?
A unit of which the value of the good or service is accounted and compared.
What is a building society?
An institution owned by its members that provides savings, products and mortgages.
What is a commercial bank?
An institution that provides services such as savings, loans and investment products.
What is the Bank of England?
The central bank of the United Kingdom.
What is the financial sector?
Firms that provide financial services to consumers including banks and insurance companies.
What are the 6 characteristics of money?
Durability, portability, divisibility, making it hard to counterfeit, having it widely accepted and valuable.
What are the 4 key functions of money?
Medium of exchange, store of value, unit of account and standard of deferred payment.
What are the 5 roles of the financial sector?
Faciliating the exchange of goods and services, allowing saving, management of risk, offering advice and monitoring borrowers.
