Banking & Economic/Free Goods [GCSE]

Banking:

Ø  This is a major industry in most countries. It helps people to borrow, lend, and carry out a range of other financial activities. It encourages the growth of output of Economics.

Some examples of banks are:

• Central Banks
• Commercial Banks
• Investment Banks
• Mortgage Banks, etc.
• Central Bank:

The Central Bank:

Ø  This is the single most important and influential bank in a country.

Ø  The central bank is a government owned bank which provides banking services to the government and commercial banks.

Functions:

• It acts as a banker to the government.
• It acts as a banker to commercial banks.
• It acts as a lender of last resort.
• It manages the national debt.
• Holds the country’s reserve of foreign currency and gold.
• It issues bank notes.
• Implements the government’s monetary policies:  with the prime aim of keeping inflation low and steady. This involves controlling the money supply and influencing interest rates throughout the economy,…