Households place savings in banks, banks lend to producers and insurers protect firms against specified risks. A loss of confidence causes deposits and lending to fall. Which conclusion is most accurate?
Money can no longer be used to buy goods
Government must stop borrowing immediately
Insurance removes the need for firms to manage risk
Financial-sector disruption can reduce credit and investment, affecting consumers, producers and government revenue
30 exam-style questions on OCR GCSE Economics 2.8 The role of money and financial markets, covering 2.8.1 Money as a medium of exchange, 2.8.2 Role of the financial sector, 2.8.3 Importance of the financial sector, 2.8.4 Interest rates and saving, borrowing, investment, and 2.8.5 Effect of interest rate changes. Each one has a worked solution and a mark scheme showing where the marks go.