Cambridge IGCSE · Economics (0455)
5 multiple-choice questions marked as you go, and 5 written questions with worked solutions. All on Money and banking.
An individual chooses to use their savings to purchase a collection of rare stamps, believing that the value of the stamps will increase significantly over the next ten years. In this scenario, which function of money is the individual primarily seeking to replace with the stamps?
What is the primary way that a commercial bank generates profit for its shareholders?
Which of the following describes the most important difference between commodity money (such as gold) and fiat money (such as modern banknotes)?
Which of the following is a function that is primarily performed by a central bank?
A manufacturer wants to export goods to a new buyer in another country but is concerned about the risk of non-payment. Which service provided by a commercial bank would best resolve this problem?
Explain the significance of the portability characteristic of money for a consumer when making daily purchases.
Write your answer out first, then check it against the worked solution.
Explain the function of money as a unit of account and how it assists consumers in comparing the value of different products.
Write your answer out first, then check it against the worked solution.
Explain how a significant decrease in purchasing power, caused by an inflation rate of \( 50\% \), undermines the function of money as a store of value.
Write your answer out first, then check it against the worked solution.
(a) Identify two characteristics of money that ensure it remains useful for daily transactions.
(b) Explain the difference between a central bank and a commercial bank in terms of their primary customers.
(c) State the role of a commercial bank in helping a producer expand their business operations.
Write your answer out first, then check it against the worked solution.
(a) Explain the function of a central bank as a \'lender of last resort\'.
(b) If a central bank increases interest rates from \( 3.25\% \) to \( 4.5\% \), analyze the likely effects on the level of household borrowing and the total spending in the economy.
Write your answer out first, then check it against the worked solution.
* The content provided by thinka is generated by AI and may not always be accurate or up-to-date. Please use it as a supplementary resource and verify with official materials.
This page can show you how a good answer looks. It cannot tell you what your answer was missing. thinka marks your written work against the real mark scheme in about 15 seconds.
Want more questions like these? Get a fresh set on this topic, graded as you go.
Practice More