Explain the differences between current and savings accounts and the functions of the central bank in Cameroon.

Welcome back Socrates — been a while! Let's pick up where you left off. a) Explain three differences between current account and savings account deposits. 1. Purpose: A current account (checking account) is primarily for frequent transactions, payments, and day-to-day expenses. A savings account is designed for accumulating funds and earning interest over time. 2. Liquidity/Access: Current accounts offer high liquidity, allowing easy access to funds through checks, debit cards, and online transfers. Savings accounts often have restrictions on withdrawals or transfers, making them less liquid. 3. Interest Earned: Savings accounts typically earn interest on the deposited amount, encouraging long-term saving. Current accounts usually offer little to no interest. b) Explain three functions of the central bank in Cameroon. 1. Issuing Currency: The central bank is the sole authority for issuing currency (banknotes and coins) in the country. This ensures a uniform and stable currency supply. 2. Banker to the Government: It manages the government's accounts, receives payments on its behalf, and provides short-term loans to the government. This helps the government manage its finances. 3. Banker to Commercial Banks: The central bank holds deposits from commercial banks, provides them with loans (lender of last resort), and facilitates interbank transfers. This maintains stability in the banking system. c) state and explain: i. Two negative effects of inflation in an economy. 1. Reduced Purchasing Power: Inflation erodes the value of money, meaning that a fixed amount of money can buy fewer goods and services over time. This particularly affects individuals on fixed incomes. 2. Uncertainty and Reduced Investment: High and unpredictable inflation creates economic uncertainty, making it difficult for businesses to plan for the future and discouraging long-term investment. ii. Two qualities of good money. 1. Durability: Good money must be able to withstand wear and tear from frequent handling and use without deteriorating. This ensures it can be used repeatedly over time. 2. Portability: Money should be easy to carry and transport, allowing for convenient transactions. This facilitates its use as a medium of exchange. Send me the next one 📸