Eco (4 - The Financial Sector)

Students should be able to:

1. explain the concept of the Financial Sector;
2. state the role of the Financial Sector;
3. identify the functions of the Financial Sector;
4. explain the concept of the Informal Sector;
5. explain the concept of money;
6. describe the development of money;
7. explain the functions of money;
8. describe the qualities of money;
9. explain the phrase “money supply”;
10. describe the role of the Central Bank and other financial institutions;
11. distinguish between the types of financial instruments.

CONTENT
1. The Financial Sector: The complex mix or network of markets, households, businesses,
governments, laws and institutions interacting with one another.
2. The role of the Financial Sector in mobilizing and making loanable funds available from savers to
spenders for consumption and investment purposes.
3. Functions of the financial sector.
4. Economic activities that are not officially regulated and which take place outside the formal norms
of business transactions.
5. Money as any item considered acceptable to be used as payment for goods and services.
6. From bartering to modern forms of payments
7. Four main functions of money.
8. Four main qualities of money.
9. Money supply: the total stock of money in the economy at any moment.
10. Roles of the Central Bank and the following financial institutions:
(a) Commercial Bank;
(b) Stock Exchange;
(c) Share Market;
(d) Credit Union;
(e) Development Bank;
(f) Insurance Company;
(g) Mutual Fund;
(h) Building Society;
(i) Investment Trust Company;
(j) Informal credit institutions (Sou Sou, Box, Partner, Sindicatos, Meeting Turns).
11. Financial instruments:
(a) treasury notes and bonds;
(b) corporate bonds;
(c) municipal bonds;
(d) equity securities.