FT Money & Banking

What is the difference between paper money and coins?

• Paper money can be used for small transactions, while coins are suitable for larger transactions.

• Paper money has intrinsic value, while coins do not have intrinsic value.

• Paper money is easily damaged, while coins are more durable.

• Paper money is used in developed countries, while coins are used in developing countries.

• There is no difference between paper money and coins.

Which type of money is determined by the underlying commodity?

• Paper money.

• Metal coins.

• Cryptocurrency.

• Digital money.

• Ancient money.

What is meant by "digital money"?

• Money whose value is based on a specific commodity.

• Money printed by the central bank.

• Money in the form of paper and metal.

• Money that exists in the form of deposits and electronic transfers.

• Money used in ancient times.

What is meant by seigniorage?

• The profit earned by the central bank from printing money.

• The cost charged by commercial banks for lending.

• The percentage of money stored in the banking system.

• The amount of money in circulation in the form of coins.

• The price set by the central bank for buying gold.

What is the "money multiplier"?

• The ratio of bank reserves to the amount of money that can be created by the bank.

• The ratio of national income to total bank deposits.

• The algorithm used in cryptocurrency transactions.

• An index that measures consumer confidence in the state of the economy.

• The expected inflation rate set by the central bank.

What is the difference between fiat money and commodity money?

• Fiat money has no intrinsic value, while commodity money has intrinsic value.

• Fiat money is used in developing countries, while commodity money is used in developed countries.

• Fiat money can only be used for small transactions, while commodity money is suitable for larger transactions.

• Fiat money cannot be printed by the central bank, while commodity money can be printed.

• There is no difference between fiat money and commodity money.

What is meant by interest rate?

• The price set by the central bank for buying and selling foreign currencies.

• The fee charged by the bank to customers for the use of credit cards.

• The percentage of profit earned by investors from their investments.

• The cost charged by commercial banks for lending to customers.

• The percentage decrease in stock prices in the stock market.

What is meant by monetary policy?

• Policies issued by the central bank to regulate the amount of money in circulation in the economy.

• Policies issued by the government to regulate international trade.

• Policies issued by the central bank to control inflation.

• Policies issued by the government to influence interest rates.

• Policies issued by the government to reduce unemployment.

What is meant by the financial system?

• The system used by the central bank to print new money.

• The system that regulates fund transfers between banks at the international level.

• The system that regulates fiscal and monetary policies in a country.

• The system that includes financial institutions and financial markets.

• The system used by the government to collect tax revenue.

What is meant by interest?

• A portion of the profit distributed by a company to shareholders.

• The fee charged by the bank for the use of banking services.

• The nominal value of a bond at maturity.

• A portion of income that borrowers must pay to lenders in exchange for using money.

• The profit earned by the bank from the difference between the interest rate given to customers and the interest rate received from customer deposits.