chapter 16- money and banking Flashcards
1
Q
functions of central bank
A
- sole issuer of legal tender
- the government’s bank
- the bankers’ bank
- lender of last resort
2
Q
characteristics of money
A
- durable
- acceptability
- divisibility
- uniformity
- scarcity
3
Q
definition of money
A
money is any commodity that can be used as a medium of exchange and is widely accepted for the purchase of goods and services.
4
Q
definition of bartering
A
bartering is the act of swapping items in exchange for other items through a process of bargaining and negotiation, due to absence of money in the economy.
5
Q
definition of central bank
A
the central bank is a government owned bank which manages the nations money supply snd oversees the nations banking system.
6
Q
definition of commercial bank
A
a commercial bank is a retail bank that provides financial services to its customers.
7
Q
what are the various forms of money
A
- cash
- bank deposits
- central bank reserves
8
Q
functions of money
A
- medium of exchange
- measure of value
- store of value
- standard for deferred payment
9
Q
functions of commercial banks
A
- accepting deposits
- making approved advances
- credit creation
- other banking services( cheque clearance, foriegn exchange, money transfer, online banking)
