Q Central Bank is a/an
Central bank is the Apex bank as it is banker's bank.
Money is a medium of
Money is often defined in terms of the three functions or services that it provides. Money serves as a medium of exchange, as a store of value, and as a unit of account.
The function of money is that it is a
Well in an easy way to understand this, we can say that the primary function of money as a store of value is that it can be used to transfer purchasing power from present to future.The main reason behind this is that it is most economical and convenient way to store money as its storage does not require much space. Basically, money as a store of value provides security to individuals.
The most liquid asset among the following is?
Cash is a highly liquid asset followed by the banking accounts, checkable account, short-term promissory notes, treasury bills and other government bonds.
One of the measures of money supply is
There are several standard measures of the money supply, including the monetary base, M1, and M2. The monetary base is defined as the sum of currency in circulation and reserve balances (deposits held by banks and other depository institutions in their accounts at the Federal Reserve).
The process of money creation or credit creation IS done by
The process of money creation, commercial banks are able to create credit, which is in far excess of the initial deposits.
Money is anything that is
Money to be used as a medium of exchange must be universally acceptable. All people must accept a thing as money. Or the government should give it legal sanction. And for performing the other two functions—that is, to be used as a store of value and standard of deferred payment—money should have stability of value. In other words, the value of money should not change often.
Barter system is
The system of exchange where goods or services are directly exchanged for other goods or services without saying a medium of exchange, such as money is known as the Barter system
One drawback of barter exchange is
The functioning of the barter system requires a double coincidence of wants on the part of those who want to exchange goods or services. It is necessary for a person who wishes to trade his good or service to find some other person who is not only willing to buy his good or service, but also possesses that good which the former wants.
What do you mean by credit creation by commercial banks?
The CREATION of CREDIT or DEPOSITS is one of the most vital operations of the COMMERCIAL BANKS.