Introduction to Central Banks and the Stock Exchange IGCSE Economics Introduction to Central Banks and the Stock Exchange

Starter – Money, Money, Money What are the qualities of ‘money’? Acceptability Durability Portability Divisibility Scarcity Look at your item Could it be used as money? Why?

Learning Outcomes To be able to describe the functions of Central Banks in the economy To understand the difference between commercial and central banks To be able to describe the functions of stock exchanges in the economy

Introduction to Central Banks

Review – Commercial Banks Everybody tell me something that you learned about banks….

Central Banks – What are they? Central Banks are owned by the government Although they are often run independently They play a key role in the economy

Central Banks generally have two core economic purposes….. Monetary Stability Financial Stability Central Banks have different functions to ordinary banks which help them to meet these objectives……

Task – 5 mins In pairs look at the questions on the sheet Can you discuss and come up with answers to the questions? Are there any other questions you have? How do these functions help the central bank to achieve ‘financial stability’? Which of these functions is most important in achieving ‘monetary stability’?