Money & Banking
Need to KnowAt the end of this section the student should be able to:
• Outline the limitations of barter • Define money • Outline the functions of money • Outline the characteristics of good money form • Explain the difference between face value and intrinsic value • Explain the difference between M1, M2 and M3 money supply • Define the PLR • Demonstrate how banks create credit • Outline the limitations on banks creating credit • Effect of plastic money on a bank’s ability to create credit • Explain Gilt edge investments, exchequer bill and money at call • Outline, with diagram, how a banks satisfies its twin requirement of liquidity and profitability • Outline the powers of a central bank to control credit creation • Outline the make up of the ECB and the monetary policy instruments it uses • Outline the responsibilities of the Irish Central Bank |
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