Money and banking Revision Questions and Answers

1. Give four circumstances under which a trader would operate a fixed deposit account
2. Give any four functions of money
3. Highlight four reasons why loans advanced by commercial banks in Kenya may not appeal to many people
4. Give four disadvantages of barter trade

5. Identify the motive of holding money in each of the circumstances below:-
(a) Need to hold money to cater for future unforeseen eventualities
(b) Need to have money to cater for daily expenses
(c) Need to have money with hope that prices will fall in future in order to purchase more
6. Identify four roles of the Central Bank as a government banker
7. E-banking is a method of banking through electronic systems. Give four reasons to account
for the rising popularity of this banking system
8. Mention four ways in which individuals can hold money
9. State three motives of holding money
10. Outline four differences between commercial banks and non- bank financial institutions
11. Identify four roles played by the international monetary fund in international trade

29. MONEY AND BANKING
1. Explain five characteristic of a monopolistic market.
2. Highlight any five modern trends in the Banking industry in Kenya
3. Explain five ways in which commercial banks have enhanced the development of business
activities in the country
4. Explain five ways through which the central bank of Kenya can expand the supply of money in an economy
5. Explain five methods of payments offered by commercial Banks in Kenya
6. Explain five factors that can lead to a cheque being dishonoured
7. Explain four emerging trends in the banking system
8. Banking has played a major role in Kenyan’s economic development. Explain five current trends in banking sector

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