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provide the money consumers need for cash and for daily expenses and purchases.
Commercial Banks
The role of a commercial bank is they accept deposits, lend money, Process payments, Issue bank drafts
and checks, Offer safety deposit boxes for items and documents.
By knowing the magnitude of the flow of the money and the quantity of things exchange of money on
the others.
1. The value of money increase and flow of things offered for money increases at about the same
weight. The price level will remain constant.
2. The flow of money increase and the flow of things for the money increase but the increase of
money is greater, so the price level will rise.
3. The flow of money increase and the flow of things offered for money remains constant, the
price level will rise.
4. The flow of money increase and the flow of things offered for money decrease and the price
level will rise and the value of things declined.
5. The flow of money decrease and the flow of things offered for sales increase the price level
will fall.
6. The flow of money decreases and the flow of things offered for sales decreases but the
decrease for money is greater, the price of level will fall.
7. The flow of money decrease and the flow of things offered for money remains constant, the
price level will fall.
8. The flow of money and the flow of things exchange both decline at about the same rate, the
price level will remain unchanged
9. The flow of money remains constant and the flow of things offered for sales increases, the
price level will fall.
10. The flow of money remains constant and the flow of things offered for money decreases, the
price level will rise.
Gross national product could under no changes in savings equal investment and taxes equals goods and
services. if savings investment exceed, investment would remain unchanged. And the government
expending goods and services.
The CB is part of commercial banking system of the country hold. The reserve of commercial bank and
uses them in the interest of banking and business of the country and the CB is generally act as a banker
of the government.
Commercial bank plays an important role with the respect of the quantity of money that circulates
within monetary system.
Credit Money
it is checkable deposits that are money, not the paper check or the debit card. Although you can make a
purchase with a credit card, it is not considered money but rather a short-term loan from the credit card
company to you.
Checking deposits is considered as credit money in a form of deposit in the bank, upon demand.
Post-dated cheque – (dated before the day of payment not negotiable until the date issued)
A surplus describes a level of an asset that exceeds the portion used. A surplus
describes the amount of an asset or resource that exceeds the portion that's
actively utilized. A surplus can refer to a host of different items, including income,
profits, capital, and goods. In the context of inventories, a surplus describes
products that remain sitting on store shelves, unpurchased. In budgetary
contexts, a surplus occurs when income earned exceeds expenses paid.
A budget surplus can also occur within governments when there's leftover tax
revenue after all government programs are fully financed.
the circular flow diagram represents the organization of an economy in a simple economic model. This
diagram contains, households, firms, markets for factors of production, and markets for goods and
services.