Cambridge AS & A Level Economics
9.4Money and banking
Money and banking in Cambridge AS & A Level Economics: what the syllabus expects you to know, the learning objectives and how to practise.
Subtopic128 practice questions6 lessons
Overview
Policies to reduce inflation (9.4.6) are taught in the inflation lesson covered at 4.6.
Learning objectives
What the syllabus expects you to be able to do.
- 9.4.1Define money and explain its functions and characteristics.
- 9.4.2Define the money supply.
- 9.4.3Explain the quantity theory of money (MV = PT).
- 9.4.4Explain the functions and objectives of commercial banks: deposits, lending, balance sheet items, reserve and capital ratios, liquidity, security and profitability.
- 9.4.5Explain the causes of changes in the money supply in an open economy: credit creation and the bank credit multiplier, the central bank, deficit financing, quantitative easing and the balance of payments.
- 9.4.6Evaluate policies to reduce inflation.
- 9.4.7Explain the demand for money using liquidity preference theory.
- 9.4.8Explain interest rate determination using the loanable funds and Keynesian theories.
Lessons
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Banks and the central bank: functions and objectives
55 min
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Credit creation and the bank credit multiplier
55 min
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Interest rate determination: liquidity preference, loanable funds and non-economic factors
55 min
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Money: functions and characteristics
45 min
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The money supply and the demand for money
50 min
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The quantity theory of money
50 min
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Sample question
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