Coins
Legal tender
Main forms of money
Notes
Bank accounts
Largest porpotion of painment
Are not legal tender
Medium of exchange
16.1 Money
Store of value
Functions of money
Unit of account
Standard of deferred payments
Generally acceptable
The characteristics of money
Durable
Banks which aim to make a profit by
providing arange of banking services to
households and firms
Current account
Easy and immediate access to money
Accept deposite
Deposit or time account.
Overdraf
C16
Cover short-term gaps between expenses
and income
Expensive way
Lend
Taking a loan
Roles
Customers may be asked to provide
collateral
Commercial bank
Enable customers to make payments
Include credit cards, standing orders, direct
debits, debit credit cards and on line
banking
Built up a range of other services that they
offer their customers
Make a profit for its shareholders.
Aims
Liquidity
Islamic finance
16.2 Banking
Being able to turn an asset into cash quickly
without a loss.
Islamic banks have provided finance for
firms by lending to them in return for a
share in their profits
The single most important and influential
bank
Owned by governments and are responsible
to them
Acts as a banker to the government
Operates as a banker to the commercial
banks
Acts as a lender of last resortManages the
national debt
Central bank
Functions
Holds the country's reserves of foreign
currency and gold
Issues bank notes
Implements the government's monetary
policy
Money supply
Interest rate
Controls the banking system
Represents the governmen
Independence
Central banks got the authority to decide the
rate of interest
Unlikely to be tempted to lower the rate of
interest to win public support
Full of acknowledge
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