Geography cls 12

Economic Systems

• A mixed economy combines elements of capitalism and socialism to promote economic growth and stability.

Basic Economic Problem

• The basic economic problem arises from the scarcity of resources, which leads to unlimited wants and needs, resulting in the fundamental questions of what to produce, how to produce, and for whom to produce.

Functions of Money

• Money serves as a medium of exchange, facilitating transactions and eliminating the need for bartering.
• Money acts as a unit of account, allowing for the measurement and comparison of the value of goods and services.
• Money provides a store of value, enabling individuals to save and invest for the future.

Central Bank

• The primary role of a central bank is to regulate the money supply, maintain low and stable inflation, and promote economic growth.
• Central banks set monetary policy, manage foreign exchange reserves, and oversee the stability of the financial system.

Commercial Banks

• The primary purpose of commercial banks is to provide financing to individuals and businesses, facilitating economic activity and growth.
• Commercial banks accept deposits, make loans, and provide other financial services, such as payment systems and credit facilities.