Role of money & financial markets

Money

anything that is widely acceptable as a means of payment

Medium of Exchange

Any item sellers generally accept and buyers generally use to pay for a good or service.

Unit of Account

a means for comparing the values of goods and services

Store of Value

something that keeps its value if it is stored rather than used

Means of Deferred Payment

the attribute of money that makes it easier to borrow and to repay loans

Commercial Banks

Privately owned financial institutions that accept demand deposits and make loans and provide other services for the public

Building societies

Organisations that offer a range of financial services. However, their major business is providing savings accounts and lending money for the purpose of buying property.

Bank of England

The central bank for the UK. Its role is to monitor the banking system and to be a banker to the banks. It is responsible for setting interest rates in the UK.

Saving

income not used for consumption

Investment

spending on capital equipment by industry