Money and banking

Question 1

what is meant by money?

Answer 1

Money is any commodity that can be used as a medium of exchange in the purchases of goods and services for example , coins and bank notes

Question 2

What are the various forms of money?

Answer 2

Legal tenders(cash), commercial bank deposits and central bank reserves

Question 3

What are the key functions of money?

Answer 3

A medium of exchange,a measure of value ,a store of value and a standard of deferred payment

Question 4

What are 3 characteristics of money?

Answer 4

Divisibility, Durability and Acceptability

Question 5

what is a central bank?

Answer 5

The monetary authority that oversees the country’s money supply and banking system

Question 6

What is a commercial bank?

Answer 6

A retail bank that provides financial services

Question 7

What are the functions of a commercial bank?

Answer 7

Accepting deposits,Making advances(giving loans),Credit creation

Question 8

What are the functions of a central bank?

Answer 8

The bankers bank,The governments banks, accepting deposits