Money and banking are strongly connected. Money has several roles, one of which is serving as a standard for deferred payments, and it is used to pay workers, often paid straight into their bank accounts. The amount workers receive varies according to the industry they work in. In some countries, lending by both private sector banks and public sector (state-owned) banks has risen in recent years.
(a)[2]
Define what is meant by ‘a standard for deferred payments’.
(b)[4]
Explain two reasons why agricultural workers may earn less than manufacturing workers.
(c)[6]
Analyse the reasons why private sector banks may make higher profits than public sector banks.
(d)[8]
Discuss whether a rise in bank lending will benefit an economy.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Money function that makes borrowing and lending possible” …