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money banking - Coggle Diagram
money banking
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Providing Deposit Accounts: Savings, current accounts.
Lending Money: Personal loans, mortgages, business loans.
Holding Cash, Securities, and Equity: Managing assets and liabilities.
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Profitability, liquidity, and solvency.
- Functions and Characteristics of Money
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Durable, divisible, portable, acceptable, stable, and scarce.
- Policies to Reduce Inflation
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- Interest Rate Determination
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Interest rates are influenced by the demand for money (liquidity preference) and the central bank’s monetary policy.
- Demand for Money (Liquidity Preference Theory)
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People prefer to hold money for transaction, precautionary, and speculative purposes.
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Any asset that functions as a medium of exchange, a unit of account, a store of value, and a standard of deferred payment.
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The total amount of money available in an economy, including cash, bank deposits, and other liquid assets.
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Describes how banks expand the money supply by lending more than their reserves, leading to a multiplied increase in the money supply.