Exam (elaborations)
AQA A-level Economics: Financial Markets 2024 Exam Questions and Answers
- Module
- AQA A LEVEL Economics
- Institution
- AQA A LEVEL Economics
AQA A-level Economics: Financial Markets 2024 Exam Questions and Answers
[Show more]
Content preview
AQA A-level Economics: FinancialMarkets 2024
Exam Questions and Answers
What system of exchange did money replace? - Answer>>
Money solves the problems created by the barter system. Instead
of having to find someone who had the goods you wanted and
wanted your goods, money could be used instead.
What are the 4 main functions of money? - Answer>> 1.
Medium of exchange - between buyer and seller
2. Deferred payment - it is a standard of deferred payment.
3. Unit of account
4. Store of value
What are the two types of money? - Answer>> 1. Narrow
money - money that is ready to be spent immediately, e.g. cash,
debit and credit cards.
2. Broad money - Broad money includes all of narrow money and
also money that is less accessible and can't be spent
immediately, like money in savings accounts, cheques or
government bonds.
What are financial markets? - Answer>> Financial markets are
any exchange that facilitates trading of financial instruments, such
as stocks, bonds and foreign exchange
What are the roles of financial markets in the UK economy? -
Answer>> 1. Facilitate savings - people can invest
savings/pensions into assets like shares/gov bonds. These can
help generate a 'return' on savings. Offering a secure place to
store money and earn interest.
, 2. Lend to businesses and individuals - financial markets provide
an intermediary between savers and borrowers.
3. To allocate funds for productive uses: they allocate capital to
where the risk-adjusted rate of return is highest.
4. Exchange of goods and services - contactless payment cards.
5. Provide forward markets - in currencies and commodities.
Forward markets allow agents to insure against price volatility.
6. Provide a market for equities - they can let people buy/sell
shares in companies. Also allow business to raise fresh equity to
fund their capital investment and expansion.
What are the three types of financial market? - Answer>>
Money market
Capital Market
Foreign exchange market
What is the money market? - Answer>> · Money market -
where you can buy and sell short-term financial assets, like
overdrafts. Includes inter-bank lending.
What is the capital market? - Answer>> · Capital market -
where you can buy and sell long-term financial assets, like large
business loans. To raise medium and long-term finance for
businesses/government.
o Borrowing takes place by issuing bonds and shares.
What is the foreign exchange market? - Answer>> · Foreign
exchange market - where you can buy and sell foreign currencies
like the American dollar. The spot exchange rate is the rate you
can purchase/sell currency at right now.
What is the contribution of the UK financial sector to the
economy? - Answer>> · In 2018, the financial service sector
contributed £132 bn to UK economy, 6.9% of total output. Sector
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller RevisionKing. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £6.38. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
79650 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now
