Chapter 16 Money and Banking

Which is not a function of money?

• durability

• measure of value

• medium of exchange

• store of value

Which is not a problem of bartering as a medium of exchange?

• the need for a double coincidence of wants

• the need for divisibility

• the need for portability

• the need for trade and exchange

Which is not a function of a central bank?

• the facilitation of company growth

• the government's bank

• the lender of last resort

• the sole issuer of bank notes and coins in the country

Which is a secondary function of commercial banks?

• accepting deposits

• credit creation

• making advances

• offering internet banking

Which are not functions of a commercial bank?

• cheque clearance and foreign exchange dealings

• internet banking and money transfer facilities

• lender of the last resort and bankers' bank

• loans and credit creation

Money enables people to save. Which function of money does this describe?

• Medium of exchange

• Store of value

• Unit of account

• Standard for deferred payments

What would make an item unsuitable to act as money?

• It is easy to carry

• It is generally acceptable

• It is perishable

• It is recognizable

What is a function of a central bank?

• Controlling the money supply

• Deciding on the amount of government expenditure

• Issuing shares

• Raising taxes

What is the main aim of a commercial bank?

• To act as banker to the government

• To issue bank notes

• To make a profit

• To manage the national debt

Demand deposits include

• Saving account deposits and fixed deposits

• Saving account deposits and current account deposits

• Current account deposits and fixed deposits

• All type of deposits