Money and banking：練習題

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.

Explain the function of money as a unit of account and how it assists consumers in comparing the value of different products.

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.

(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.

(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.