Ch.16- Money and banking

Question 1

Money

Answer 1

An item which is generally acceptable as a means of payment

Question 2

Commercial banks

Answer 2

Banks which aim to make a profit by providing a range of banking services to households and firms

Question 3

Liquidity

Answer 3

Being able to turn an asset into cash quickly without a loss

Question 4

Central bank

Answer 4

A government-owned bank which provides banking services to the government and commercial banks and operates monetary policy