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Money and Banking - Coggle Diagram
Money and Banking
Characteristics
Durability: Can last for a long time
Portability: Can easily be transported from one place to another
Divisibility: Can be divided into smaller values to pay for cheaper items
Scarcity: Must be scarce enough to be valuable
Acceptability: Accepted by many people
Functions
Means of Deferred Payment: Used to pay for products gradually
Unit of Account: Used to measure the value of a product
Medium of Exchange: Can be exchanged for other products
Store of Value: Holds its value over a long period of time
Forms
Money: Something that is used to pay for other things
Near Money: Assets that can easily be turned into cash
Financial Institutions
Commercial Banks: Provides financial services to customers and is privately owned
Providing Financial Services for Profit
Buy and Selling Shares: Banks use money deposited by customers to buy and sell shares to make profits
Providing Insurance: Banks can provide many types of insurance to customers
Loans: Banks can give loans to customers, who will pay back the loan in an agreed amount of time and the interest on the loans
Forex: Banks can exchange a currency with other foreign currencies
Deposits & Savings Accounts: Deposit Accounts are accounts that customers can use to deposit and withdraw their money. Savings accounts are accounts that provide a customer a safe place to store money, and customers are given interest.
Central Banks: Control the nation's money and currency and is owned by the government
Functions
Regulating Financial Institutions: Sets rules that banks must follow
Managing Gold & Foreign Currency Reserves: Manages the gold and foreign currency reserves to stabilize or grow the value of the national currency
Managing National Debt: Will repay debts of the Government
Operating the Government Monetary Policy
Issuing Notes and Coins: Is the only institution allowed to print a nation's currency