Economics Chapters 16 and 18- Money and Banking and Workers

Explain Medium of Exchange

• It is a common Yardstick to measure money

• It eliminates the function of double coincidence of wants

• The value of money remains constant

• It will never lose its value

Name one function of commercial banks

• To print money

• To decide interest rates

• Lender of last resort

• To provide loans and overdrafts

What is not a function of a central bank

• Lender of last resort

• Deciding interest rates

• Supervising commercial banks to ensure the smooth functioning of the banking system

• Agency functions

Define Store of value

• Value of money remains constant

• Eliminates function of double coincidence of wants

• Money is divisible

Define Unit of Account

• It is a common yardstick to measure money

• Savings and deposits can be done monthly

• When your bank account is protected

Characteristics of Money:

• Durable

• Portable

• Heterogenous

• Indivisible

What is known as the apex institution of a country's financial and monetary system?

• Commercial Banks

• Member Banks

• Central Banks

What is the most significant and traditional function of Commercial Banks?

• Provide loans

• Provide overdrafts

• Provide discounting of bills

• Accepting deposits

What has the monopoly of note issue in every country?

• Commercial Banks

• Central banks

Central banks are the ___ of cash reserves

• Agent

• Custodian

• Bank