Chapter 16: Money and Banking Flashcards
1
Q
Money
A
An item which is generally acceptable as a mean of payment
2
Q
Four functions of money
A
Medium of exchange, Store of value, Unit of account, Standard of deferred payments
3
Q
Commercial banks
A
Banks which aim to make a profit by providing a range of banking services to households and firms
4
Q
Liquidity
A
Being able to turn an asset into cash quickly without a loss
5
Q
Central bank
A
A government-owned bank which provides banking services to the government and commercial banks and operates monetary policy
6
Q
National debt
A
The amount that the government owes
