Chapter 16: Money and banking

Question 1

Functions of money

Answer 1

• Medium of exchange
• Store of value
• Unit of account
• Standard of deferred payment

Question 2

Characteristics

Answer 2

• Acceptable
• Limited in supply
• Durable
• Portable
• Divisible
• Homogenous
• Recognisable

Question 3

Functions of commercial banks

Answer 3

• Accept deposits
• To lend
• Enable customers to recieve and make payments
• Change foreign currency
• Store of important documents
• Administration of wills
• Completion of transaction forms
• Purchase and sale os shares
• Insurance
• Mortgage loans