Question

1. How is money used in everyday life? Explain with examples.
2. Explain with examples, how people are involved with the banks.

Answer 1

Answer:

1. In everyday life money is used in following ways: It is used as a medium of exchange and facilitates the buying and selling of goods like car house food clothes etc. It is used as deposits with the banks or to keep it at home like fixed deposits bonds etc. It is used for borrowing and lending like loan.

2. We know that banks accept the deposits from the people who have surplus money and also pay an interest on the deposits. But banks keep only a small portion (15 percent in India) of their deposits as cash with themselves. This is kept as a provision to pay the depositors who might come to withdraw money from their accounts in the bank on any day. They use the major portion of the deposits to extend loans to those who need money. In this way banks mediate between those who have surplus money and those who need money.

Answer 2

Answer:

1. ans : we used everyday money in life for example grocery,chocolate ,chip ,snacks, etc.