The functions of money
Money serves four main functions: a medium of exchange (avoids the need for direct barter), a unit of account (a common way to measure and compare the value of different goods), a store of value (can be saved and used later), and a standard of deferred payment (allows debts and future payments to be agreed in fixed terms).
The banking system
A central bank (like the Central Bank of Nigeria) regulates the country's money supply, sets monetary policy, and oversees commercial banks -- it does not deal directly with the general public. Commercial banks accept deposits from and lend money to individuals and businesses, earning interest on loans while paying a smaller interest rate on deposits.
Taxation
A direct tax is paid straight to the government by the person or organization it's charged on, based on their income or wealth (e.g. personal income tax, company tax). An indirect tax is added to the price of goods/services and collected by sellers on the government's behalf (e.g. Value Added Tax).
Example 1: Classify personal income tax and VAT as direct or indirect taxes, and explain the difference.
Personal income tax is a direct tax -- it's paid straight to the government by the earner, based on their income. VAT is an indirect tax -- it's added to the price of goods and collected by the seller, who then remits it to the government; the tax burden falls on whoever buys the good, not on a specific named taxpayer.
Government budgets
A government budget deficit occurs when spending exceeds revenue in a period, usually financed by borrowing. A budget surplus occurs when revenue exceeds spending. Persistent deficits can lead to rising government debt, which is why governments often aim for a balanced budget or manageable deficit over time.