12 Questions
Which of the following best describes the function of money in an economy?
A medium of exchange and store of value
What is the primary function of the central bank in relation to credit control?
Regulating interest rates and controlling money supply
In a fractional reserve banking system, what happens when a commercial bank makes a loan?
The money supply increases and the bank's reserves decrease
What is the impact of high levels of non-performing assets (NPAs) on a bank's financial stability?
Decreased capital adequacy and potential insolvency
What is the significance of credit in an economy?
It facilitates economic activities by providing funds
How does the central bank control credit in the economy?
By increasing interest rates
What is the main function of money in an economy?
To facilitate exchange and serve as a store of value
How does a fractional reserve banking system work when a commercial bank makes a loan?
It increases the money supply through credit creation
What is the impact of globalization on national economies?
Increased competition and access to larger markets
How does globalization affect cultural exchange?
Promotes cultural exchange and integration
What role do multinational corporations play in globalization?
Facilitate international trade and investment
How does globalization impact the movement of labor across borders?
Increases the movement of labor across borders
Test your knowledge of the functions of money in an economy, the role of central banks in credit control, the dynamics of fractional reserve banking, and the impact of non-performing assets on a bank's financial stability.
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