4.4 - Money

Question 1

What are the 4 functions of money?

Answer 1

Store of value
Measure of value
Standard of deferred exchange
Unit of account

Question 2

What is Narrow Money?

Answer 2

Measure of value of coins + notes in circulation
Other equivalents easily converted into cash

Question 3

What is Broad Money?

Answer 3

Total money held by households + firms
Mainly commercial bank deposits

Question 4

Give 3 examples of debt finance?

Answer 4

Bank Loan
Overdraft
Credit Card
Mortgage
Bond

Question 5

What is a secured loan?

Answer 5

Borrowed money is secured against an owned asset (House etc)

Question 6

What is an unsecured loan?

Answer 6

Money is only supported by borrowers creditworthiness

Question 7

What are the main examples of equity finance?

Answer 7

Angel Investors
Venture Capital
Stock Market Listing
Crowd Funding

Question 8

What are Angel Investors?

Answer 8

Individuals who inject capital for business start up

Question 9

What is Venture Capital?

Answer 9

Firms specialise in building high risk equity portfolio

Question 10

What is stock market listing?

Answer 10

Offering shares to investors

Question 11

What is Crowd Funding?

Answer 11

Raise capital from large number of individual investors