{"id":2511,"date":"2023-10-03T08:25:09","date_gmt":"2023-10-03T08:25:09","guid":{"rendered":"http:\/\/localhost\/ecole9ja\/?p=2511"},"modified":"2023-10-03T08:28:29","modified_gmt":"2023-10-03T08:28:29","slug":"week-5-ss1-third-term-commerce-notes","status":"publish","type":"post","link":"https:\/\/ecolebooks.com\/nigeria\/posts\/week-5-ss1-third-term-commerce-notes\/","title":{"rendered":"Week 5 – SS1 Third Term Commerce Notes"},"content":{"rendered":"

WEEK 5 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\n<\/strong>TOPIC: CENTRAL BANK
\n<\/strong>CONTENTS
\n<\/strong>\u00a0\u00a0\u00a0\u00a0<\/strong>1.\u00a0\u00a0\u00a0\u00a0Features\/characteristics of the Central Bank
\n\u00a0\u00a0\u00a0\u00a02.\u00a0\u00a0\u00a0\u00a0Functions of the Central Bank
\n\u00a0\u00a0\u00a0\u00a03.\u00a0\u00a0\u00a0\u00a0Monetary Policy
\n\u00a0\u00a0\u00a0\u00a04.\u00a0\u00a0\u00a0\u00a0Instruments of Monetary Policy
\nCENTRAL BANK
\n<\/strong>The Central Bank is the apex financial institution in a country which is responsible for the management and control of monetary affairs of the country.
\nFEATURES\/CHARACTERISTICS OF THE CENTRAL BANK <\/strong>
\n\t1.\u00a0\u00a0\u00a0\u00a0It is owned by the government
\n2.\u00a0\u00a0\u00a0\u00a0It is established through Act of Parliament
\n3.\u00a0\u00a0\u00a0\u00a0It is the apex financial institution in a country.
\n4.\u00a0\u00a0\u00a0\u00a0There is only one Central Bank in the country
\n5.\u00a0\u00a0\u00a0\u00a0It is not a profit oriented institution
\n6.\u00a0\u00a0\u00a0\u00a0It does not transact business with individuals
\n7.\u00a0\u00a0\u00a0\u00a0It is the only bank authorized by law to issue currencies.
\nFUNCTIONS OF THE CENTRAL BANK<\/strong>
\n\t1.\u00a0\u00a0\u00a0\u00a0Issuing of currency .i.e. Bank notes and coins
\n2.\u00a0\u00a0\u00a0\u00a0It serves as bankers to the government
\n3.\u00a0\u00a0\u00a0\u00a0It act as banker to the banks i.e. it is a banker to commercial banks
\n4.\u00a0\u00a0\u00a0\u00a0It acts as a lender of last resort. When commercial banks are faced with difficult financial problem, they can raise loans from the Central Bank as the last resort.
\n5.\u00a0\u00a0\u00a0\u00a0It control the foreign exchange reserve.
\n6.\u00a0\u00a0\u00a0\u00a0It acts as the clearing house for bank; banks come to the Central Bank for settlement of inter bank debts.
\n7.\u00a0\u00a0\u00a0\u00a0Management of the national debt. This includes the documentation as well as servicing of the debts.
\n8.\u00a0\u00a0\u00a0\u00a0It implements (carry out) government monetary policies.
\n9.\u00a0\u00a0\u00a0\u00a0It advices both the government and the commercial banks.
\n10.\u00a0\u00a0\u00a0\u00a0It maintains close contact with other International Financial Institutions e.g. IMF
\nMONETARY POLICY: <\/strong>Monetary Policy is mainly concerned with varying the money supply in the economy. The Central Bank uses some measures like the bank rate, open market operations, special deposits, directives, cash ratio etc to regulate the volume of money in the economy, thereby checking inflation or deflation when necessary.
\nInstruments of Monetary Policy\/or How The Central Bank Control the Commercial Banks.
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Bank Rate:-<\/strong> This is simply the rate of interest at which the Central Bank lends money to commercial banks and rediscount their bills. All other interest rates charged by banks on loans and overdraft depend on the Bank Rate. It is also called the Rediscount Rate. The Bank Rate is raised or lowered to reduce or increase lending capacity of the commercial Banks and by extension control the money supply in the economy.
\n2.\u00a0\u00a0\u00a0\u00a0Open Market Operations:- <\/strong>This involves buying and selling of securities (e.g. Treasury Bills) from and to commercial banks to reduce or increase the quantity of money in circulation.
\n3.\u00a0\u00a0\u00a0\u00a0Liquidity Ratio or Cash Reserve Ratio:- <\/strong>The commercial banks are mandated by the CBN to keep a specific proportion of their total deposit with the CBN as cash assets to meet customers demand. This percentage (presently 20%) can be raised or lowered to reduce or increase the amount available for lending by the banks to their customers \u2013 thereby regulating the money supply.
\n4.\u00a0\u00a0\u00a0\u00a0Special Deposits: – <\/strong>This is an instruction to the commercial banks to keep with the Central Bank special deposits over and above their statutory requirements thereby curtailing the ability of the commercial banks to create credit.
\n5.\u00a0\u00a0\u00a0\u00a0Special Directives: – <\/strong>These are special instructions which the Central Bank uses to decide which direction the lending policies of commercial banks and other financial institutions should follow.
\n6.\u00a0\u00a0\u00a0\u00a0Moral Suasion: – <\/strong>This is a gentle appeal to commercial banks to adopt appropriate policies in order to contract\/expand money supply. It is done through persuasion based on moral grounds not with the use of force of law by the Central Bank.
\nREVIEW QUESTIONS
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0State four features of the Central Bank
\n2.\u00a0\u00a0\u00a0\u00a0What is monetary policy
\n3.\u00a0\u00a0\u00a0\u00a0Explain the meaning of the monetary policy instrument \u2013 Open market operations.
\nWEEKEND ASSIGNMENT
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Which of the following services is rendered by Central Bank (a) Provision of brokerage services (b) Safe keeping of cash and other valuables (c) Discounting bills of exchange (d) Issuing currency notes
\n2.\u00a0\u00a0\u00a0\u00a0Which is the banker of all commercial banks in the country (a) CBN (b) FMBN (c) BOI (d) UBA
\n3.\u00a0\u00a0\u00a0\u00a0Which of the following is NOT a function of the Central Bank (a) Bankers bank (b) Government bank (c) Printing of currency (d) Servicing of national debt
\n4.\u00a0\u00a0\u00a0\u00a0What is NOT a means of Central Bank’s controlling the credit policy of commercial banks (a) Banker’s bank (b) Bank rate (c) Funding operations (d) Open market operations
\n5.\u00a0\u00a0\u00a0\u00a0When the Central Bank increases the bank rate its aim is to (a) Reduce the volume of public borrowing (b) Increase government revenue (c) Encourage bank to lend only to government (d) Discourage the public from saving.
\nTHEORY
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Give two functions of the Central Bank
\n2.\u00a0\u00a0\u00a0\u00a0List four monetary policy instruments used by the CBN to regulate the supply of money in the economy.
\nREADING ASSIGNMENT
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Essential Commerce for SSS by O. A. Longe
\n\u00a0\u00a0\u00a0\u00a0Page 92 \u2013 96
\n2.\u00a0\u00a0\u00a0\u00a0Comprehensive Commerce for SSS by J. U. Anyaele
\n\u00a0\u00a0\u00a0\u00a0Page 197 \u2013 202
\nGENERAL EVALUATION QUESTIONS
\n<\/strong><\/p>\n

    \n
  1. \n
    Give six reasons why retail shops adopt self service\n<\/div>\n<\/li>\n
  2. \n
    Explain six facilities a retail shop should have to encourage self service\n<\/div>\n<\/li>\n
  3. \n
    Explain five measures taken by a country to promote exports\n<\/div>\n<\/li>\n
  4. \n
    List seven contents of a bill of lading\n<\/div>\n<\/li>\n
  5. \n
    State seven distinguishing features of a mail order business\n<\/div>\n

    \u00a0<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

    WEEK 5 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 TOPIC: CENTRAL BANK CONTENTS \u00a0\u00a0\u00a0\u00a01.\u00a0\u00a0\u00a0\u00a0Features\/characteristics of the Central Bank \u00a0\u00a0\u00a0\u00a02.\u00a0\u00a0\u00a0\u00a0Functions of the…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,211],"tags":[],"class_list":["post-2511","post","type-post","status-publish","format-standard","hentry","category-posts","category-third-term-ss1-commerce"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/2511","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/comments?post=2511"}],"version-history":[{"count":1,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/2511\/revisions"}],"predecessor-version":[{"id":2512,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/2511\/revisions\/2512"}],"wp:attachment":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/media?parent=2511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/categories?post=2511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/tags?post=2511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}