Principle of Investment 3 BIS Exam Questions PDF

Principle of Investment 3 BIS ( Money &Financial Market ) Dr.MOFIED MAHER  Money and Financial Markets  TASKS - Questions : (A) Describe the functions of money? and (B) Describe the characteristics of money, including commodity money, fiat money,...

Principle of Investment 3 BIS ( Money &Financial Market ) Dr.MOFIED MAHER  Money and Financial Markets  TASKS - Questions : (A) Describe the functions of money? and (B) Describe the characteristics of money, including commodity money, fiat money, and representative money? and (C) Examine the positive and negative aspects of barter, currency, credit cards, and debit cards. Principle of Investment - Questions : (A) Explain the functions of financial institutions and how they affect households and businesses?; (B) Explain how the amount of savings in an economy is the basis of capital formation ?; (C) Analyze the role of interest and risk in allocating savings to its most productive use? Principle of Investment  Teaching the Terms OF Commodity money Fiat money Representative money Liquidity Default Principle of Investment Problems with barter … Case to study ? Inefficient Time consuming Difficult to satisfy wants and needs consistently Principle of Investment  Ans. Functions of Money Unit of account Store of value Medium of exchange Principle of Investment Ans.Sources of Money’s Value Commodity Money – medium of exchange has intrinsic value Representative money – medium of exchange represents a claim on an item of value Fiat Money – medium of exchange has value by government decree Principle of Investment Ans. Characteristics of Money Portable Durable Divisible Uniform Limited Acceptable Principle of Investment Q.What is the difference? Principle of Investment Monetary Aggregates Currency and coins Checkable deposits M1 Traveler’s checks Principle of Investment Monetary Aggregates M1 Savings accounts Time deposits M2