3rd test Flashcards
(21 cards)
What does Financial assets mean?
- have value and can be easily and quickly transfered into cash to make payments
Examples of financial assets:
- money
- Bank deposits
What does physical assets mean?
- may provide a good store of value but are not generally acceptable in exchange for other goods and may be difficult to sell quickly to raise cash.
Examples of physical assets:
- Jelwery
- Land
What is bartering?
- exchange of goods and services without use of money
What is the problem with bartering?
- requires a double coincidence of wants (both parties must want what the other offers)
- difficult to store value
- hard to set a standard measure of value
- not divisable
What is the market for money?
- individuals and organisations borrow and supply money,
- that involves banks that create deposit money
- # and a centeral bank that issues currency
What is a bank?
- a financial institution that accepts deposits, provides loans, and offers financial services to individuals, businesses, and governments
How can a bank make a profit?
- If all customers pay their loans back and the interest charged on them is higher than the interest the bank pays the customers that deposit money
How does this business sector earn money?
- If all customers pay their loans back and the interest charged on them is higher than the interest the bank pays the customers that deposit money
Meaning of the term overdraft:
- facility where a bank allows to overdraw more money than they have in their account, up to a specific limit.
- creating a negative balance
What is a mortgage?
- a loan specifically used to purchase real estate, such as a home or land. It is typically offered by a bank or lender, and the property being purchased serves as collateral for the loan. This means that if the borrower fails to repay the loan, the lender has the right to take possession of the property through a process called foreclosure.
- long term loan for property
How does Islamic banking differ from regular banking?
Don’t pay or charge interest since t goes against Shariah law.
- Make profit from fees they charge customers for banking services and let people who deposit their money in the bank get a part of the profit the bank earns
5 characteristics of good money:
- Durability :long-lasting and resistant to wear and tear
- Portability :easy to carry and transport
- Divisibility :divided into smaller units without losing its value
- Recognizability: easily recognizable and distinguishable
- Stability of Value : maintain a relatively stable value over time
When did Austria, Ireland and Croatia join the EU?
Austria: 1995-1996
Ireland: 1973
Croatia: 2013
The 27 members of the EU:
Austria,
Belgium,
Bulgaria,
Croatia,
Republic of Cyprus,
Czech Republic,
Denmark,
Estonia,
Finland,
France,
Germany,
Greece,
Hungary,
Ireland,
Italy,
Latvia,
Lithuania,
Luxembourg,
Malta,
Netherlands,
Poland,
Portugal,
Romania,
Slovakia,
Slovenia,
Spain
Sweden
Which country was affected by hyperinflation after the first world war?
- Germans had to carry wheel barrows of cash to buy goods
What is hyperinflation?
- extreme rapid inflation
- where money loses its value quickly
- double digits
What happens to the value of money if a country’s central bank begins producing money?
- inflation
- value of money decreases because more money is in circulation
- if execcive may lead to hyperinflation
3 elements which make the forgery of Euro notes hard to do:
- Watermarks
- Security thread
- holograms
Members that are not part of the Eurozone:
Bulgaria
Croatia
Czech Republic
Denmark
Hungary
Poland
Romania
Sweden
