A bank is unable to borrow from other banks to meet a short-term cash shortage. The Bank of England lends it money. Households and firms use the bank to hold money and make payments.
Explain why this action is important for financial stability.
60 exam-style questions on AQA GCSE Economics 2.5 The role of money and financial markets, covering 2.5.1a Functions of money, 2.5.1b Definition of money, 2.5.2a Agents in the financial sector, 2.5.2b The role of the Bank of England, and 2.5.2c The role of high street banks. Each one has a worked solution and a mark scheme showing where the marks go.