Banking, Money, ETC...

Which financial institutions act as a lender of last resort?

• Commercial Banks

• Investment Banks

• Central Banks

• Savings Banks

What is the most likely results of an increase in interest rates?

• Rise in investment

• Rise in borrowing

• Fall in consumer spending

• fall in productivity

A government lowers the rate of interest, but who benefits the most?

• House Buyers

• Manufacturers

• Retailers

• Savers

When will a central bank act as a lender of last resort to commercial banks?

Show Answers

• When a commercial bank face a liquidity crisis

• when a commercial banks fails to make a profit

• when a commercial bank needs to raise share capital

• when a commercial bank reduces it lending rates

What is most likely to cause a person to save a larger proportion of their weekly income rather than spend a larger proportion of their weekly income?

• a decrease in the tax on goods and services

• a decrease in weekly income

• an increase in interest rates

• an increase in the range of products available

The use of mobile cell phones to make payments is an example of which of the function of money?

• A medium of exchange

• A standard of deferred payment

• A store of wealth

• A unit of account

What is the usual reason why citizens trust their country's banknotes?

• They are acceptable for trade and exchange

• They are backed by gold at the central bank

• They are convertible into US dollars

• They are recognizable and in theroy in infinite supply

Which function of money is most closely linked to saving?

• Medium of exchange

• Standard for deferred payment

• Store of value

• Unit of account

What function does a central bank do?

• It issues local currency

• It offers overdraft facilities to consumers

• It operates deposit accounts

• It raises taxation

What is the main form of money used in Europe?

• Bank accounts

• Coins

• Gold

• Notes