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Commerce is the activity of buying and selling of goods and services,

especially on a large scale or quantity

1. GOOD TRANSPORT NETWORK: Improved and well developed means of transportation affects trade and commerce greatly. Transport systems like aeroplane, ship, electronic train can be used to move good from one place to another.

2. DEVELOPED COMMUNICATION SYSTEM : The developments of modern communication systems has eased and hastened contacts with people of different countries.

3. DEVELOPED FINANCIAL INSTITUTIONS: Financial institution have developed their services rapidly over the years. They provide quick and effective means of payments in foreign trade as well as making credits available for business.

4. SPECIALIZATION : Specialization has brought about interdependence. People now depend on one another while they produce what they have in comparative advantage and this has led to mass production.

5. PRESENCE OF DEVELOPED WAREHOUSING: Development of warehouse has enabled goods to be produced and kept ahead of demand. This help protects the goods from damages and help retain prize.

(a) Accepting Deposits
(b) Advancing Loans
(c) Discounting Bills of Exchange
(d) Transfer of Money
(e) Miscellaneous Functions

Accepting Deposits: The banks borrow in the form of deposits.
This function is important because banks mainly depend on the funds deposited
with them by the public.

(b) Advancing Loans: Another function of the bank is to
give loans to others. If the bank does not lend the deposited money to
others, how can it pay the interest on the deposits to depositors?
Banks give loans to businessmen and firms usually for short periods

(c) Discounting Bills of Exchange: A very important function of a modern bank is to discount bills or hundies of businessmen. It is like this, a businessman buys goods and is granted credit, say, for a month. The seller of the goods draws a bill of exchange which the purchaser is asked to sign.

(d) Transfer of Money:
Banks transfer money from one place to another for their customers. Banks remit the funds of the people by means of a bank draft or a cheque. This is a cheap as well as safe method of transferring money from one place to another.

(e) Miscellaneous Functions:
A bank now-a-days serves its customers in various other ways. It has lockers or ‘safe deposit vaults’. They are meant to keep the valuables of customers in safe custody. Further, a bank collects interest on behalf of its customers as well as pays dividends on behalf of joint-stock companies. It purchases and sells stocks and shares of companies for its clients. It pays insurance premium on behalf of their customers from their deposits. It executes the wills of deceased customers and acts for them as a trustee.

Money is anything that is generally acceptable as means of payment
during buying and selling activities and settlement of debt.

i. Money serve as a medium of exchange
ii. it Serve as unit of account
iii. it serve as store of value

i. Money serve as a medium of exchange

Money’s most important function is as a medium of exchange to facilitate transactions. Without money, all transactions would have to be conducted by barter, which involves direct exchange of one good or service for another. The difficulty with a barter system is that in order to obtain a particular good or service from a supplier, one has to possess a good or service of equal value, which the supplier also desires.

ii. it Serve as unit of account
Money also functions as a unit of account, providing a common measure of the value of goods and services being exchanged. Knowing the value or price of a good, in terms of money, enables both the supplier and the purchaser of the good to make decisions about how much of the good to supply and how much of the good to purchase.

iii. it serve as store of value

n order to be a medium of exchange, money must hold its value over time; that is, it must be a store of value. If money could not be stored for some period of time and still remain valuable in exchange, it would not solve the double coincidence of wants problem and therefore would not be adopted as a medium of exchange. As a store of value, money is not unique; many other stores of value exist, such as land, works of art, and even baseball cards and stamps.